Agribusiness suitors in the spotlight

27 Oct, 2010 11:25 AM

THE nationalistic fervour whipped up by Singapore Exchange's shrinking $8 billion bid for ASX Ltd is likely to refocus the country's attention on the ownership of the country's agribusiness assets.

In the past few years, Canada's Viterra snapped up ABB; private equity firm Terra Firma bought out the Packer family's Northern Territory Consolidated Pastoral properties; Canada's Agrium and AWB proposed a deal on which shareholders are due to vote next month; and, last week, Spain's Ebro bid some $600 million for SunRice.

There have been other interesting moves that haven't grabbed the headlines as much: John Kahlbetzer's Twynam Agricultural Group this week picked up an 8.16 per cent stake in Namoi Cotton; Elders sold its Rural Bank to Bendigo and Adelaide Bank for $160 million; while PrimeAg Australia yesterday hit one-year highs on hopes there may be a break-up play sooner rather than later.

There's plenty of noise, but many are tipping the next logical wave of consolidation in the agribusiness space should come among the second-tier players, The Australian Financial Review reports.

PrimeAg, for one, has been considered a logical break-up opportunity for some time. The company, which has a market capitalisation of just $216 million, is trading above its implied value, based on net tangible property assets of about $1.35 a share and value of about 40¢ a share for water rights – which, potentially, could be worth more.

The Australian Financial ReviewSource:


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