Macquarie Group has suddenly gotten a taste for berries and oranges, or so it seems after the bank’s agriculture fund revealed a $300 million takeover bid for the ASX-listed business Vitalharvest, which has thousands of hectares of orchards across Australia producing citrus and berries for Costa, the country’s largest listed horticulture group.
The offer from Macquarie Infrastructure and Real Assets’ (MIRA) bid has alternatives – a $1 for each of the 185 million units on issue to Vitalharvest unitholders by way of a trust scheme.
Or if that scheme is not backed by enough shareholders, the agriculture fund would seek to buy all of the assets of Vitalharvest for $300 million.
The Vitalharvest Freehold Trust owns a portfolio of berry and citrus farms in NSW, South Australia, and Tasmania, currently leased to Costa Group (Costa).
Macquarie said both its scheme proposal and the asset purchase plan are both fully funded and all-cash, are not subject to due diligence and have received approval from the Foreign Investment Review Board.
The proposed buy-out is conditional on Vitalharvest not conducting any capital raising or assets sales or acquisitions.
“MIRA strongly believes the all-cash transaction is highly compelling and in the best interests of Vitalharvest unitholders and expects the transaction will be well received by the responsible entity,” a company release read.
Macquarie described the Vitalharvest portfolio of berry and citrus farms as “well-aligned” with its own agricultural expertise and strategy.
In a separate statement yesterday, Costa said it regards its current Vitalharvest leases as legacy arrangements.
“All subsequent expansion by Costa beyond those sites in the berry and citrus categories has not involved and will not involve Vitalharvest under any variable lease arrangement.”
Costa said it has an existing relationship with MIRA through its leasing of several avocado farms, which are all based on fixed rental arrangements operating under 20-year leases.
“In the event that MIRA was successful in its offer and given the terms of our current leases with MIRA, Costa would be confident that the existing Vitalharvest leases could be restructured, with the aim that they convert to a fixed rental arrangement that reflects terms consistent with market conditions and that would be value accretive over the medium to longer-term,” the statement said.
It is expected the assets will continue to be operated by Costa in the long term.
