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TasAg stake for Southern Capital

By Phil Boeyen, ShareChat Business News Editor

Monday 23rd April 2001

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Southern Capital (NZSE: SCL) wants to buy 22.7% of dairy farmer Tasman Agriculture (NZSE: TAS).

The South Island-based investment company is planning to buy the shares from Timaru-based Dairy Holdings, which last month announced it intended to purchase Brierley Investments (NZSE: BRY) stake in the company.

Southern Capital says it has agreed to buy just over 8% of TasAg from Dairy Holdings and is continuing discussions to raise that to 22.7%.

Tasman Agriculture meanwhile has released details of how it plans to distribute surplus funds to shareholders prior to Dairy Holdings becoming a majority shareholder.

TasAg says it intends to distribute $45.31million of revenue reserves to shareholders by way of a taxable special dividend of 43 cents per share, payable in June.

Following the payment it will distribute a further $61.96 million by repurchasing shares on a 2 for 5 basis, at a purchase price of $1.47 per share.

The proposal is subject to shareholder approval at a special meeting to be held in June.

TasAg says Brierley has indicated its support for the proposal and will accept its share repurchase entitlements in full.

One of the conditions of the sales of Brierley's TasAg stake to Dairy Holdings was that TAS had to approved a minimum distribution of not less than $107 million to shareholders prior to settlement.

To date TasAg has realised just under $134 million from the sale of 38 New Zealand farms.

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