Shares in the rural group, Webster Limited jumped more than 52% after it revealed an $854 million approach from a Canadian buyer that already looks in the bag.
Webster shares ended at $1.935 after the agreed scheme of arrangement takeover by PSP Investments was revealed to the market.
The company said that PSP subsidiaries PSP BidCo and Sooke Investments would acquire all Webster shares not already owned by the fund manager for $2 each if shareholders and the courts vote for the scheme.
The $2 a share offer is the highest price ever for Webster shares, indicating the determination of the Canadian group to grab control.
The offer has been supported by independent directors on the Webster board.
The market has signaled that it doesn’t see any other bidders with the shares trading more than 6 cents under the offer price, sure sign investors see the deal is done and dusted.
Webster Limited CEO Maurice Felizz said the company was encouraged by PSP’s understanding of the business and its ongoing importance to regional and rural communities.
“PSP Investments has a proven track record in managing and investing in agricultural assets over the long term for sustainable value creation and therefore we believe this transaction represents a positive outcome for all stakeholders in our business,” Mr. Felizz said on Wednesday.
Webster directors Chris Corrigan and David Fitzsimons will not participate in consideration of the offer, or be involved in any recommendation to shareholders, due to their association with firms that will sell their stake in Webster but gain a slice of PSP’s new smaller venture, KoobaCo.
The takeover proposal comes about a month after Ruralco shareholders overwhelmingly voted in favour of $469 million bid from Nutrien, a Canadian fertiliser producer. Nutrien also owns the Landmark rural services group.
Saputo, Canada’s dairy giant, has become the biggest dairy processor in Australia through a $2 billion buying spree that saw the purchases of Murray Goulburn, Warrnambool Cheese and lately the cheese assets of Lion Nathan.
The ACCC last month also approved Elders’ proposed $187 million bid for Australian Independent Rural retailers.
Webster operates walnut and almond orchards in NSW and Tasmania, as well as irrigable land for cotton and other annual crops, cattle and Dorper sheep production, a portfolio of water entitlements, and honey business in NSW.
The company’s half-year result in May was hit by the drought with net profit down 46% to $2.1 million. The company says it expects a “near breakeven” position for the full year to September 30.
A shareholder vote is expected to be held early next year.
