Olam International has warned that remaining shareholders of New Zealand Farming Systems Uruguay (NZFSU) will have to find some cash if Olam's buyout of NZFSU fails.
In its takeover notice, Olam managing director Sunny Verghese said should it fail to reach the point of compulsory acquisition and NZFSU remained publicly listed, that company may need to implement capital-raising.
"Olam considers NZFSU requires new equity capital to meet its current obligations and to continue to develop its portfolio of farms," the company wrote in its takeover notice.
On Monday Olam launched a takeover bid of 55c a share for NZFSU, having secured agreement from PGG Wrightson to buy its 11.5% stake.
This took Olam's share of the company to nearly 30%, requiring it to extend the offer to all shareholders.
NZFSU has asked Grant Samuel and Associates to prepare an independent report on the merits of Olam's offer.
A copy of that report will be released to shareholders along with the target company statement, and the board reiterated its advice for them not to make any decisions on the offer until they had read all the documentation.
Shares in NZFSU have been trading at about 54c this week, after lifting about 30% since the start of the week.
