Silver Fern shares were suspended from trading on the NZAX after the Dunedin-based meat processor said it was seeking a capital injection.
Yesterday, 14,000 shares crossed at $1.25 a share. On Wednesday, 1000 shares traded at $1.50 but most of the trades that day were at 95c. Before the shares were suspended, they last traded at 35c.
Craigs Investment Partners broker Chris Timms said some investors were buying on probability the deal with Shanghai Maling, which is listed on the Shanghai stock exchange, would pass regulatory approval.
Shanghai Maling would invest $261 million to take a 50% stake in a new company called Silver Fern Farms Ltd, with the existing co-operative holding the remaining 50%.
The deal needs to be approved by shareholders on October 16 and pass Overseas Investment Office and Chinese regulatory approval.
By this time next year, Silver Fern could be debt-free and cash-positive.
As part of the deal, Silver Fern is offering shareholders a sweetener of a 30c-per-share special dividend.
The deal values the shares at $2.84.
At yesterday's price of $1.25, the special dividend was a 24% return on the shares.
Mr Timms said there was a high probability the shares would eventually trade closer to their $2.84 value if the deal was ''ticked off'' by all parties.
Farmers who did not want to supply Silver Farm because of the deal might be the ones selling on the market.
The resumption in trading gave them an opportunity to exit.
Asked if the Government decision to turn down overseas investment in the Lochinver Station sale yesterday would affect the Silver Fern-Shanghai Maling deal, Mr Timms said the two deals were different.
The Lochinver farm deal was about a large amount of property but Shanghai Maling was buying access to Silver Fern's high-value protein and a New Zealand brand name they could market in China.
Government ministers Paula Bennett and Louise Upston said they had gone against a recommendation by the Overseas Investment Office and turned down an $88 million bid by Chinese billionaire Jiang Zhaobai's flagship firm.
The Overseas Investment Office had recommended the deal be accepted.
Mr Timms said Shanghai Maling would not be putting cash into Silver Fern if it did not see some value.
Shares in Silver Fern were held by suppliers, former suppliers and retail investors.
The shares had been illiquid in the past, with some being sold when sheep and beef farms were converted to dairy units.
''They haven't been overly attractive for external buyers. This industry hasn't had a great history in New Zealand. The few people sitting in the market now are either optimistic or opportunistic.
''Dairy farmers had seen their shares in Fonterra go up but it is not often you see the same sort of response in sheep and beef.''
