Singaporean company Olam International has secured its takeover of New Zealand Farming Systems Uruguay having gained more than 61% of its shares - for $104 million - with its offer to shareholders formally closing today.
Olam, which sought a minimum 50.1% of NZFSU with its 70c per share offer, is expected to inject up to $60 million into the company, and possibly seek a further equity raising from shareholders, estimated at between $35 million and $55 million.
NZFSU went to Uruguay to set up New Zealand-style dairy farms, and while having developed 16 so far, its purchase of a total 30,000ha of land weighed heavy on cash-flows.
That led to total losses during the past two years of almost $38 million; with about $88 million required for a further 49 farm conversions.
Craigs Investment Partner Peter McIntyre said while Olam had "easily" got past the 50.1% threshold, he doubted that it would close at 75% acceptances, as many shareholders would want to retain some stake and hope for a reward in the long term.
NZFSU shares were trading around 41c in mid-July when the offer was made, and were boosted further by a rival offer.
They traded up past 60c and beyond 72c, and were yesterday trading slightly below 70c.
