18 May 2012

Dairy portfolio pulls pin on share offer

9:24 pm on 18 May 2012

A potential dairy farm investor has pulled the pin on its share offer, after failing to raise enough money.

Pastoral Dairy Investments had hoped to raise $25 million through an initial public offering, with private institutions expected to invest another $50 million.

But Pastoral Dairy Investments spokesperson, Neil Craig, says strong initial interest in the deal didn't translate into applications, particularly in the provinces.

"If we couldn't get $25 million, we weren't going to go," he says.

He declined to say how much was raised but said interest had been affected by the recent softening of returns in dairying.

There is a perception that dairying is for dairy farmers, who need millions of dollars to set up their own operations.

Individual urban investors could put sums of $250,000 and above into farming partnerships, but below that there was little scope for smaller investors to get into the sector.

The company is still seeking a "significant" cornerstone shareholder to underpin any eventual return it made to the market.