Singaporean commodities giant Olam International has extended its offer date for its 100%, $37.6 million takeover of listed New Zealand Farming Systems Uruguay, but will not increase its 70c per share offer.
Analysts believe Olam will fall short of the level required and the takeover will stall with less than 90% acceptances, while Olam is telling the remaining shareholders to be aware they would have to shoulder some of a required capital infusion of up to $US115 million ($NZ142.5 million) for New Zealand Farming Systems Uruguay (NZFSU).
With about 10% of shareholders digging in and not selling, trying to force a revised offer, acceptances of Olam's offer have only incrementally crept up 6.2% to an 84.2% holding in recent weeks.
Olam needs 90% acceptances before it can compulsorily acquire the last 10%.
Olam has extended the offer from June 14 to June 29 to give shareholders more time to consider it.
Craigs Investment Partners broker Peter McIntyre said it was "unlikely" Olam would gain the outstanding 5.8% by June 29.
Had Olam upped its offer, all shareholders at present would have had to be offered the same increase, but by letting the offer lapse and expire, Olam could come back later with a new offer for the outstanding shareholders, he said.
While the outstanding shareholders have cited the recent sale of an NZFSU Uruguayan farm that fetched more than 25% above valuation as underscoring their claims for a higher offer, Mr McIntyre noted predictions of strong commodity prices in the short to medium term would also be driving them.
Olam highlighted in a statement yesterday that NZFSU was still in the development phase and required a large amount of capital for asset development and ongoing working capital.
"As such, Olam would like to reiterate that no dividends are expected to be paid to NZFSU shareholders in the foreseeable future," the company said.
Olam's offer provided the opportunity for shareholders to sell before they were called upon to support the large capital raising required - $US110 million to $US115 million of additional capital, a figure supplied by the independent adviser for the takeover.
Olam said that for every 1000 shares held, the remaining shareholders would have to contribute $NZ570 in order to raise $US110 million.
