4 Oct 2012

Olam to make full takeover bid for NZFS

7:06 am on 4 October 2012

Olam International of Singapore plans to make a full takeover offer for New Zealand Farming Systems Uruguay.

The commodities company, which already owns nearly 86% of Farming Systems, says it will offer 75 cents per share for the remaining 14%.

The offer is a 7% premium to the New Zealand company's last traded price of 70 cents and the total cost of the acquisition is $160 million.

Olam says the price is fair and full, and it will not increase the offer.

NZ Farming Systems, which has been developing dairy farms in Uruguay, is due to repay a $110 million loan from Olam by the end of the year.

It has been considering raising the money through a pro rata rights issue of up to $135 million from shareholders.

Managing director David Beca says the company will issue an independent appraisal report once Olam sends the offer to shareholders in the next two to four weeks.

He says the offer has come at a time when the company was planning to go to shareholders for more money.

Mr Beca says Farming Systems small shareholders should wait for an independent appraisal of the offer before they consider selling.

Farming Systems lost $US7.6 million in the year to June, a decrease of 13% compared with the previous year.