Australia’s largest horticultural producer Costa Group has confirmed it has received a takeover offer from a New York private equity firm, which could reap shareholders a bumper harvest.
The Melbourne-based company disclosed the proposal, which values the target’s issued equity at more than $1.6 billion, in a statement to the stock exchange on Tuesday.
The unsolicited, non-binding offer from Paine Schwartz Partners to acquire all the shares in Costa it does not already own was received on May 31, the board said.
Paine Schwartz Partners acquired 14 per cent of Costa shares in October before flagging a potential approach of between $3.20 and $3.30 per share.
The eventual offer, re-confirmed on Tuesday, would give shareholders $3.50 per share, a 24 per cent premium on the closing price of Costa stock on Monday.
Shareholders will also be entitled to any interim dividend declared for the six-month period to July 2 this year of up to 4c per share.
Paine Schwartz Partners have indicated the Foreign Investment Review Board has granted it permission to acquire the entirety of Costa’s shares, but approval may need to be refreshed if any co-investors were brought in.
Costa watered down speculation that a deal was likely in the coming days, saying further due diligence and negotiations are expected to continue throughout July.
Costa shares had shot up 10.4 per cent to $3.29 just before 11.30am AEST.
Company co-founder Frank Costa, a descendent of Italian migrant farmers who helped save the Geelong Cats from financial oblivion, died in 2021 at the age of 83.
Paine Schwartz Partners have been contacted for comment.
