Saudi firm bids €60m for Irish-based CFG
DUBLIN-based agronomy business Continental Farmers Group (CFG) looks set to be bought after a Saudi bidder launched a €60m takeover offer for the Irish company.
Shares surged 50pc after the news in Dublin. CFG owns a huge estate of commercial farm land in Eastern Europe, mainly in Ukraine and Poland.
In a statement, CFG said United Farmers Holding Company (UFHC) had made a cash offer for the business worth €58.2m.
UFCH is offering 35 pence per share upfront to buy CFG plus a further two pence if performance targets are met after the takeover.
Its a 50pc premium to Continental's previous closing price. Commenting on the offer, Dr Khalid Al Malahy of UFHC, said it wanted to make a long-term investment in the agriculture sector "with the principal objective of developing sustainable sources of food, grain and fodder on a global scale".
"UFHC firmly believes that it is well-positioned to support the proposed growth of CFG, both financially and through the experience of the consortium members in the international agricultural markets."
UFHC is wholly-owned by Saudi Agricultural and Livestock Investment, Saudi Grains and Fodder Holding and another Saudi firm, Almarai Company.
CFG chairman Nicholas Parker said the board had "unanimously recommended" the offer.
"It brings access to substantial capital and to the expertise of the members of the consortium in the international agribusiness sector.
"The offer recognises that the CFG business is highly scalable and represents an excellent opportunity for CFG to accelerate the development of its operations," he said.
The bid is a huge boost to a company that has only been on the public markets for 20 months.
It also guarantees a windfall for the Aryzta-owned Origin Enterprises, which has 24pc of CFG.
News of the offer also overshadowed CFG's results, which showed pre-tax profits that nearly halved to €1.5m on the back of more investment in CFG's land in Poland and the Ukraine.