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Landcorp's Crafar bid falls short with receivers

Tuesday 13th July 2010 1 Comment

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Landcorp Farming is out of the running to purchase the 16 Crafar family dairy farms that are in receivership, after KordaMentha announced it was not one of the preferred tenders in bids that closed last Wednesday.

More than 50 offers were submitted on all or parts of the Crafar portfolio, which went into receivership last October owing more than $200 million to Westpac, Rabobank and PGG Wrightson.

Natural Dairy (NZ) Holdings, a Hong Kong-listed investment company which has stated that it wants to use the Crafar farms as the production base for a vertical supply of milk products into China, would now appear to have front running as one of the preferred bidders. Negotiations between those remaining in the purchase race and KordaMentha will continue over the next few days.

Landcorp made a joint bid with Wairakei Pastoral for the properties, which it said would have synergies with some of its other dairy farms. Its chief executive Chris Kelly said Landcorp’s tender was going to be “an opportunistic bid”, but he always expected it to be less than the $200 million that NDH was expecting to offer.

“I’ve always said that if the rumours were correct, ours was significantly below the Chinese bid. Others may have seen more in the farms than we did,” Kelly said.

Natural Dairy has a purchase agreement with the receivers for all 16 farms, but this is conditional on obtaining Overseas Investment Office consent, as well as the receivers not getting a better or more suitable offer.

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Comments from our readers

On 14 July 2010 at 11:22 am Robert said:
It's not entirely clear whether NDH is a Chinese Govt controlled enterprise or not. It seems that the impression we have is that it is. Anyway it seems that it would be a good thing that our biggest customer has a stake in our business. One way would be for Landcorp and partners (maybe even our govt) bought the farms and leased it to them. In fact they could hire Landcorp itself to provide the farm management. Then they could sell the product to China or anybody else for that matter. If they wanted to build another processing plant then why not? NZ'rs would provide most of the workers (unless we couldn't). They could process for anyone but I think most of the product would go to China. My thought is unless we work with them, then they could go anywhere else including say Uruguay which I think we (one NZ company ) owns about 30000 hectares of dairy land and which needs money to develop it. Logically I would be surprised if they haven't already considered it (but I don't think they have a FTA). It would be a disaster if they went elsewhere and developed dairy farms in opposition to us.
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