Farming Systems recommends Olam’s 70c/share offer

Farming Systems recommends Olam’s 70 cents/share offer

By Paul McBeth

Sept. 2 (BusinessDesk) – NZ Farming Systems Uruguay Ltd.’s directors have recommended Olam International Ltd.’s takeover bid, which values the dairy farm developer at $171 million.

Farming Systems’ chairman John Parker said the increased offer, which is now in the independent adviser report’s valuation range, and assurances that Singapore-based Olam will be able to provide funding helped sway them.

Last week, Olam upped its price to 70 cents a share from 55 cents after Uruguay’s Union Agriculture Group put in a rival bid, while Farming Systems sought a capital injection from a third party. UAG subsequently dropped out of the race, and Farming Systems has stopped its negotiation with the other group.

“Based on discussion with Olam, your directors are now satisfied that Olam can provide funding certainty required in supporting the capital needs of NZS in a manner that is fair and equitable to continuing shareholders,” Parker said. “Olam has also assured your directors that it is committed to the existing strategy of intensive pastoral-based dairying and will keep an open mind on the potential returns from NZS’ farms in the East of Uruguay.”

Olam needs another 13% to reach its target 50.1% stake in Farming Systems after Accident Compensation Corp. sold its 7% holding last week.

The shares were unchanged at the offer price of 70 cents in trading today.

(BusinessDesk)