Attention is now turning to the identity of the mysterious suitor courting New Zealand Farming Systems Uruguay after the withdrawal from the takeover race yesterday of Uruguayan-based Union Agriculture Group (UAG).
The move by Olam International this week to raise its offer price from 55c a share to 70c a share appears to have stumped UAG, prompting chairman Juan Sartori to say his company was conservative and there were other opportunities available to it in Uruguay.
"While we believe NZFSU was potentially very good for UAG and that we could make it a successful operation, the opportunity does not look so good for us at that price."
He said UAG would happily work with Olam or NZFSU in Uruguay in the future.
This leaves Olam in the driving seat, but New Zealand Farming Systems Uruguay (NZFSU) has revealed it was in negotiations with an unnamed, potential new passive investor on terms "that are currently acceptable to the board".
Olam has already acquired ACC's 7% stake in NZFSU for $12 million to add to its 18.45%, and it was in pre-bid lock-up agreement with PGG Wrightson Investment Ltd to consider buying its 11.52%.
An independent analysis by Grant Samuel valued NZFSU at between $NZ160 million and $195 million, equivalent to a share price range of 65c to 79c with a mid point of 72c.
That report said NZFSU had underperformed since its inception and its current funding shortfall stemmed from a decision in 2007 to acquire 19,000ha of land but also difficulties introducing New Zealand farming systems in a foreign country because of a lack of managers with necessary experience.
The company needed $88 million of new capital to complete the conversion of 49 dairy units.
Grant Samuel said with limited ability to raise extra debt without an equity injection, NZFSU faced undertaking a rights issue to existing shareholders, but there was no certainty of success or of finding a strong, cornerstone shareholder.
This week NZFSU reported a significantly improved loss for year of $14.8 million compared with a $23 million loss the previous year.
