A Chinese-backed company is emerging as a leading contender to buy 16 North Island dairy farms, after the receiver for the Crafar family portfolio yesterday dismissed a bid by Landcorp.
UBNZ-Natural Dairy, which has Hong Kong backing, claimed yesterday it already has a sale and purchase agreement with the receiver to buy the 16 Crafar farms, conditional on approval from the Overseas Investment Office (OIO).
But it might also have to satisfy political concerns, even if the OIO gives its blessing.
A UBNZ-Natural Dairy spokesman, Bill Ralston, said any other offer for the farms would be a back-up should its bid fail to get OIO approval.
Anderson Lloyd consultant and lawyer Walter Rutherford said if there was an existing sale and purchase agreement, the receivers could not disclaim it, but it made sense to have a back-up offer, given the offer was conditional.
Landcorp chief executive Chris Kelly said he was uncertain why the State Owned Enterprise's bid failed, but he believed it could be because its was too low, even though he said it was based on current market prices.
"I can only guess it might be financial.
We always knew it would not be the highest bidder in terms of money offered," he said.
Mr Kelly declined to reveal Landcorp's offer, but The New Zealand Herald has reported UBNZ-Natural Dairy was offering $213.2 million plus the cost of livestock.
That could potentially cost another $40 million.
The farms were placed in receivership last October, owing more than $200 million to creditors and the receivers, Michael Stiassny and Brendon Gibson, said in a statement yesterday that more than 50 offers were submitted for some or all of the Crafar portfolio.
An undisclosed number were identified as preferred tenders, with whom negotiations would begin.
The involvement of China-backed UBNZ-Natural Dairy has raised concerns about foreign ownership of productive farm land from Prime Minister John Key down.
UBNZ-Natural Dairy vice chairman Graham Chin yesterday tried to put his company's bid in perspective, saying in the last year the OIO has approved the sale of 80,000ha to foreign buyers.
His company wishes to buy 8615ha out of two million hectares of New Zealand farm land, and purchase of 25,000 dairy cows out of a herd of five million.
Mr Chin said the offer was the best deal for those owed money by the Crafars, as well as for the economy.
The business would be vertically integrated, giving the company control of the product from the farm to the market, potentially boosting the value of export earnings by $100 million and requiring an extra $30 million of capital expenditure.
Mr Ralston said the OIO application was lodged last week and a ruling was not expected for another 10 weeks.
