Dairy Holdings accepts $30m offer

Last updated 00:00 14/11/2007

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Dairy Holdings Ltd, the company partly-owned by Timaru millionaire Allan Hubbard, is selling its 41.5 per cent shareholding in Tasman Farms Ltd for more than $30 million.

The New Plymouth District Council (NPDC) has launched a full takeover offer of 110c a share for Tasman Farms, which owns 24 mostly dairy farms in north-west Tasmania.

Dairy Holdings, which owns 57 dairy farms and 10 grazing units in the South Island, has already agreed to accept the offer.

Dairy Holdings general manager Colin Glass said the company was selling its shares because it wanted to pursue investment opportunities in the South Island, where it was growing aggressively.

Timaru-based Tasman Farms chairman Edward Sullivan said he understood the Douglas family from the United States, who owned 19.9% of Tasman Farms, also supported the bid. Societe Generale, a European investment bank, owned 8.56%, ACC 8% and the remainder was owned by individual New Zealand shareholders.

Sullivan has urged all shareholders to take no action on the takeover bid till an independent appraisal was completed.

Tasman Farms shares were suspended on Thursday to allow the takeover notice to be received. Shares, which last traded at 110c, a 12-month high, resumed trading yesterday.

A full takeover would cost NPDC around $74m. NPDC's investment fund, Taranaki Investment Management Ltd (TIML), owns $300m worth of assets and returns $21.5m to NPDC each year. NPDC cashed up its main investment in Taranaki electricity network Powerco three years ago in a storm of controversy and defended the decision at the time as having too many eggs in one investment basket and needing to diversify.

TIML chairman John Armstrong said it decided to buy shares in Tasman Farms, its first foray into dairy, because it could see a potential to give a higher return than an investment on the sharemarket.

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- The Press

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