German company makes $216m offer for Turners & Growers

Munich-based BayWa AG is offering $1.85 a share to acquire fruit and vegetable company Turners & Growers, having struck an agreement to buy Guinness Peat Group’s 63.46% stake.

The deal values Turners & Growers at $216.5 million and GPG will collect $137.4 million from the sale of its stake.

Under takeover rules BayWa must make an offer to acquire up to 100% of the shares of Turners & Growers on the same terms.

BayWa operates in the agriculture, building materials and energy sectors and is listed on the Frankfurt stock exchange with a market capitalisation of about 1 billion euro.

BayWa says the offer price represents a 9% premium to the closing Turners & Growers share price of $1.70 yesterday and a 22% premium to the one-month volume weighted average price prior to GPG announcing the wind up of its investment portfolio on February 11 this year.

BayWa intends to send the offer documents to T&G shareholders within 30 days.

The transaction is conditional on approval from the German Federal Cartel Office and the New Zealand Overseas Investment Office.

GPG chief investment offer Arithony Elsen said GPG supports BayWa's proposed offer and believes that it is attractive.

"GPG welcomes the opportunity for the offer 
to be presented to all shareholders of Turners & Growers. BayWa is a highly reputable company with a strong history in trading agricultural products. I expect that BayWa's expertise will assist Turners & Growers continue its successful expansion into international markets.“

In February GPG announced its strategy to undertake an orderly realisation of GPG's investment portfolio over time.

GPG shares fell 0.5c to 61.5c in morning trade.

Forsyth Barr analyst Guy Hallwright has maintained his “buy” recommendation on GPG shares.

He said the BayWa deal increases Forsyth Barr's estimate of GPG’s net asset value by 0.7c to $1.026.

“We think GPG should be trading at a minimum of 79c, which would represent a discount of 25% on our Coats valuation, 20% on the market values of major holdings and of unlisted entities, and 10% on the market values of listed stakes of less than 15%. 

“This also allows for pension deficit funding plus £30m of estimated corporate and asset sale costs over the next 2-3 years.”