Synlait Farms now in a trading halt:
http://www.unlisted.co.nz/uPublic/un...cement_id=2282
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Synlait Farms now in a trading halt:
http://www.unlisted.co.nz/uPublic/un...cement_id=2282
This is very interesting.
I am hoping for a capital raise from a new cornerstone shareholder at somewhere north of $1.80 for maybe a 20% stake.
Can't see it being a rights issue ... existing holders unlikely to pour further funds in at these prices ( certainly not me !! )
They may be entertaining a complete takeover of the company ....
They might be entering into a contract to purchase a bunch of other farms ( some of the Dairy Holdings portfolio possibly ) with associated capital raising.
Might be moving to the NZX with associated IPO capital raising ...
All will be revealed before the end of the week !!
FH - do they need more capital or only if new farms are involved?
Given their isn't a liquid market to determine the true market value, any share placement or rights issue (unless deeply discounted) is problematic.
With an $8++ payout they will certainly generate plenty of cash over the next 12 months ... so a capital injection with the current asset base is not urgent but the gearing is certainly not sustainable should payouts drop below $6 for a sustained period.
Knowing the team like I do I would think a capital raising within 90-95% of NAV would be a minimum and with the unknown value of the water rights they have and the potential value to be unlocked there they may want over 100% ...
My $1.80 may be a bit light as with land values and cow prices at present and a BOOM year of potentially a $8.50 type payout it is certainly a sellers market ( for the first time in a long time !! )
I would be very very surprised if it is a rights issue ... you would see some selling pressure in Synlait Milk shares if that was the announcement as alot of the big holders in Farms would need to sell some Milk shares to take up their entitlements.
Agreed , but the top 50 shareholders in each probably have at least 25 names in common ...
I think some of the current holders would struggle with a pro-rata rights issue, and there isn't a ready market to unload excess rights, not a liquid market anyway. More likely a cornerstone shareholder, or a placement, with maybe a smaller amount for current holders. I wouldn't mind picking up a few, just so that I could call myself a Queen Street Farmer.
I agree , I think it will more likely be an exit mechanism for existing holders near N.A.V. rather than a request for more capital from them. Likelihood of a new cornerstone shareholder is pretty high , both have been high priority for the board for quite a while and especially now Synlait Milk is completely separate and trading so well.
Trading halt to continue until 21 October:
http://www.unlisted.co.nz/uPublic/un...cement_id=2287
Takeover offer announced:
http://www.unlisted.co.nz/uPublic/un...cement_id=2292
Media release and takeover notice:
http://www.unlisted.co.nz/uPublic/un...cement_id=2293
http://www.unlisted.co.nz/uPublic/un...cement_id=2294
So the Chinese are buying - wonder if Winstone/Greens will get a hold of this one?
FarmerHamilton - 31% premium - are you happy or holding?
Farmer Hamilton, man are you:t_up: on a roll.Int in where you will invest from here; putting any into shares ? If so be int i your thoughts re what sectors and companies you are looking at outside of NZ. cheers JT
Hi JoshuaTree , I am not counting my chickens just yet as the OIO are still to approve but if Crafar Farms got thru then this one should be OK.
Yes , what to do with the money ... $268,800 ..
A portfolio of shares I am thinking ... 1/3 probably dividend paying multi-nationals
I already own and will add to ( KO:US, CL:US , UTX:US , JPM:US , SO:US , CVX: US , DIS:US )
1/3 non or low paying div growth stocks ( CELG:US , GOOG:US , APC:US , FB:US )
1/3 global property stocks ( 4:HK , 14:HK , 778:HK , SHB:UK , GPOR:UK , SLG:US , VNO:US , GPT:AU , DXS:AU , CFX:AU )
I will probably sell naked puts ( at strikes 5-10% below spot ) against many of these stocks rather than outright purchase of the shares as buying in near all-time highs is a little unwise. May go "all-in" on CELG:US however with a decent purchase of $50-75k worth
Thanks for sharing FH. Naked puts a bit beyond my experience and know how but sounds like a good downside protection.. Cheers
Selling a naked put on say Coca-Cola shares is promising to buy them at a certain price on a certain day.
Currently shares are about $38.50 so I will probably look to sell the $37.50 Jan 2014 puts for around 75c.
I am promising to buy the shares at $37.50 if they are below that level ( very happy to buy at 3% discount to current price ) and if the shares are above this level then I get to keep the 75c ... and then do it again on the March or April option series.
Upside : 75c / share premium in my account instantly I sell the option , and possibly buy Coke at decent discount ( when taking off the 75c premium I would effectively be long Coke at $36.75 in Jan ... $1.75 lower than current level.
Downside: Margin required to be held with broker. Max gain if Coke keeps rising is only 75c/sh , no dividends.
I love options !!!!
Whilst I can appreciate Farmer Hamilton is happy to exit after a longer innings, as a holder for only 5 months I am disapponted that the only opportunity for a stand alone dairy farm interest looks likely to disappear under my nose with only the two principal directors hanging on to their interest in the new set up. It is the more disappointing that it is occurring as things look much better--Sylait Farms last accounts were on $5.8 a kg when the projected return for the current year is currently of the order of $8 kg. Fran O'Sullivan in NZ Herald took NZ investors to task for shunning Synlait in 2009 ignoring the fact that the offer was pulled and a totally different offer made to the overseas investors i.e. excluding the farms. Now we are again having overseas interests tying up Synlait Farms with no opportunity for local investors to show an interest. I find it extremely difficult to believe that there would not be substantial interest in a listed dairy farm operation. If there are other holders following this thread who would prefer to retain an interest I would be interested to hear.
Good morning Ileon.
No, you're not alone.
I too would have welcomed the chance to continue to hold SNLF.
I too would really like a way to access the NZ dairy industry.
I am disappointed that I will end up being compulsorily bought out at such a low price.
P*ssed off.
1. We do not have the current nta--at best the valuation is at 31 May 2013. By the time the takover offer is made it will be 6 months out of date.In the same time Fonterra's forecasts have increased exponentially the most recent being $8.62 this month.Somehow I doubt any dairy farmer wishing to sell will feel constrained to wait sveral seasons to push up his asking price.
2. Synlait is also a business of scale rather than a collection of assets. It is interesting to compare Skyline also on Unlisted and with substantial property holdings particularly prime Queenstown but also elsewhere has just traded at $9.75 against its last asset backing of $6.33- a premium of 54%
3.With last years production of 5.31m kg the bottom line can improve $15m on forecast payout alone.
4.My quibble is less with price than inevitable sale-- even if the price were fair I would prefer to stay there and I would prefer to see NZ investors get first chance.
Trading halted until further notice:
http://www.unlisted.co.nz/uPublic/un...cement_id=2298
Takeover offer documents posted:
http://www.unlisted.co.nz/uPublic/un...cement_id=2309
Best estimate by Synlait Milk is now a ...................... $9.00 .............. payout for 2013/14
Hard to sell at $2.10 now !!
The $2.10 takeover is " fair value " if you assume average milk payout going forward is about $6.90 ... so not exactly generous
Might not accept offer now .... ????
Shareholder presentation on the offer:
http://www.unlisted.co.nz/uPublic/un...cement_id=2312
AGRIHQ.CO.NZ 14/11/13.
An irrigated 129ha North Canterbury farm has sold at auction for $6.7 million, or $52,300 a hectare, a record price for a North Canterbury dairy farm.
PGG Wrightson Christchurch agent Peter Crean said Gairloch, sold by his colleague Athol Earl, was converted to dairy in 1995 and has milked about 450 cows, with production peaking at 188,000kg milksolids last season.
“We have a strong board of motivated buyers at present with few local dairy properties of this calibre available, so it was no surprise that the sale achieved such a positive result,” Crean said.
Five bidders took part in the auction and the room was full of others including bankers, farm valuers and neighbours, he said.
“Bidding was spirited, with local farmers and syndicates from elsewhere in the country entering into keen competition.
Compared to this $52300 per hectare Grant Sammuel suggests it is appropriate to discount the Company's May 2013 nta of $44824 a hectare by 10% for delay in realisation and costs of sale. It seems the buyers are there and rather than discount the valuation needs to be updated and there would be a counter argument that any buyer wishing to acquire 13 farms would have considerable difficulty and delay i.e. he should pay a premium not discount.Applying the latest sale price would increase the total nta by $29,462,916.
Trading to recommence tomorrow:
http://www.unlisted.co.nz/uPublic/un...cement_id=2319
It seems unbelievable that the Directors of Synlait could impose a trading halt lasting an unheard of 6 weeks and more incredible that this has enabled the bidder (SFLH [including two existing Synlait directors]) to advance the 50.18% held under lock up agreements to 66.78%. Apparently the trading halt has meant SFHL has been free to buy under its offer for the last 3 weeks but no one else has been permitted to trade. The trading halt is being lifted on the bidder securing two thirds of the company. It would be great to see a standoff by the remaining shareholders.
90% acceptances reached:
http://www.unlisted.co.nz/uPublic/un...cement_id=2322
So again we have no 'farms' listed on the sharemarket.
We need a partial privatisation of LandCorp.
The media frequently and not incorrectly usually refers to Cushings' Rural Equities which is exactly the way they run it. Given this latest escapade on Unlisted where Synlait suspended trading for 6 weeks whilst the takeover progressed there is yet more reason to be wary of Unlisted companies particularly where there is a majority shareholder advancing its own interests.
Notice of variation posted (extension of offer and price appreciation).
Synlait Farms have posted a third letter of update.
There has been a further extension of the condition date.
Takeover offer has gone unconditional.