The buyer is understood to be Paine Schwartz Partners, which is based in New York and has investments in food and agribusiness companies globally.
The bidder was said to have “no current intention” of making a takeover bid for the company. Requires FIRB approval before going above the 9.99 percent physical mark.
“At this stage, the equity interest is considered a long-term investment and the acquirer has no current intention to make an offer to acquire control of CGC,” the term sheet said.
“The Acquirer may potentially be interested in seeking a seat on the Board in the event that the FIRB Condition is met.”
Paine’s Kevin Schwartz, who was president of Paine & Partners LLC and co-founded the firm in 2006, previously serving on the Costa Group board.
The purchase seems opportunistic, coming just a week after Costa Group cut earnings guidance. The downgrade sent its shares down 15 percent to around $2.
Paine was seeking to acquire a direct 9.99 percent stake, or 46.4 million shares, and enter into a forward contract with Citi for an additional 13.4 million shares, or 2.9 percent, of the company.
It already had a 2.4 percent economic interest and a prior commitment for a 4.95 percent stake from an existing Costa Group shareholder, according to the term sheet.
Citi’s desk was looking for sellers at 7 pm Tuesday.
It comes in the middle of a wave of M&A in the Australian food and agribusiness sectors. Canadian Cooke Inc. has a $1.1 billion deal to acquire salmon producer Tassal Groupwhile Brazil’s Minerva Goods signed a $400 million takeover of lamb producer Australian Lamb Co late last week and JBS acquired pork producer Rivalea and salmon company Huon last year.
Now it’s Costa’s turn to turn heads. Previously, the group was partially owned by US private equity firm Paine. & Partners, before listing on the ASX in 2015.
more to come