Synlait takeover bid passes 90 per cent

ALAN WOOD
Last updated 12:01 28/11/2013
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Chinese conglomerate Shanghai Pengxin Group and its Canterbury partners have received enough acceptances for shares in Synlait Farms to proceed with compulsory acquisition of the dairy farming operation.

The Chinese company and two of the existing Synlait Farms shareholders John Penno and Juliet Maclean last month launched an $85.7 million takeover bid for the company.

The joint-venture vehicle, SFL Holdings, has received acceptances in respect of 91.16 per cent of the shares in the company, according to a statement on the Unlisted stock exchange.

That takes it above the 90 per cent minimum acceptance condition, meaning SFL Holdings can proceed to compulsorily acquire the remaining shares.

The SFL offer remains conditional on SFL Holdings receiving Overseas Investment Office and Chinese regulatory authorities' approvals for the transaction.

The closing date for the offer is December 20 and the offer must be unconditional by January 19, unless these dates are extended by SFL Holdings in accordance with the takeovers code.

Shareholders who had not accepted the offer were encouraged to do so before the end of the offer period, Synlait Farms said in a statement.

When the joint venture made the $2.10 a share offer, Synlait Farms had last traded at $1.60.

Synlait Farms owns about 4000 hectares of mainly irrigated land southwest of Christchurch. It produces about 5.3 million kilograms of milksolids a year from those farms around Ashburton.

If the bid is successful Shanghai Pengxin will control about 12,000 hectares of New Zealand land. It has already bought 16 Crafar farms in the North Island amounting to 8000 hectares of land and associated dairy cows for about $200m.

The ownership of farmland by Chinese or other nationalities, has been opposed by some Kiwis.

Campaign Against Foreign Control of Aotearoa spokesman Murray Horton spoke against ownership of New Zealand land by foreigners after the launch of the bid for Synlait Farms.

At the time Synlait Farms chairman Barry Brook said the SFL Holdings offer came as part of five proposals received from interested parties that participated in a capital-raising process that started in May.

SFL's was the highest-value proposal received in the process. It included a commitment by the partners to invest a further $20m into the business on top of the takeover price.

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