US investor puts in takeover bid valuing Costa Group at $1.6 billion

US investor puts in takeover bid valuing Costa Group at $1.6 billion

Costa's mushroom facility in Monarto, South Australia, helps make it the largest mushroom grower in the southern hemisphere. 

Costa Group (ASX: CGC) has confirmed the receipt of a takeover offer from existing shareholder Paine Schwartz Partners (PSP) that values the fruit and vegetable company at more than $1.6 billion, although the indicative proposal is still subject to due diligence and other conditions.

After speculation yesterday that lifted CGC shares by more than 15 per cent, Costa has today confirmed that more than a month ago on 31 May it received confidential, non-binding indicative proposal from the US sustainable food chain fund wished to acquire all shares it did not already hold.

The $3.50 per share proposal would represent a 34.6 per cent premium to what PSP paid in October to acquire a substantial interest of 13.78 per cent in the company. 

The US investor has been involved in the Costa Group journey for much longer than that however, having been a majority owner of the company prior to its 2015 initial public offering (IPO) on the ASX with its first equity stake acquired in 2011, back when its name was Paine + Partners.

Shares have climbed almost by another 12 per cent this morning to $3.30 at the time of publication, representing an 18 per cent surge since before the takeover speculation was made public but still short of the levels put forward in the offer.

"The Costa board, together with its financial and legal advisers, carefully assessed the indicative proposal when received and determined it was in the best interests of shareholders to grant PSP an eight-week period of non-exclusive due diligence to enable PSP to determine whether to put forward a binding proposal. The due diligence period commenced on 6 June 2023," Costa stated in today's announcement.

"Notwithstanding recent media speculation that Costa and PSP were hopeful of an agreed deal in coming days, further due diligence and negotiations on a potential scheme implementation agreement are expected to continue through July.

"There is no certainty that the Indicative Proposal will result in a binding offer or that any transaction will eventuate."

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

"Ugly" lemon and lime juice cube startup Naked Rivals squeezes $3m from angel investor

"Ugly" lemon and lime juice cube startup Naked Rivals squeezes $3m from angel investor

A husband-and-wife founder team, whose lemon and lime juice cubes s...

GreenFort, Gaw Capital join forces on $800m joint venture

GreenFort, Gaw Capital join forces on $800m joint venture

Brisbane-based alternative real estate fund manager GreenFort Capit...

Riverside backs Wollongong IT powerhouse VITG as M&A opportunities beckon

Riverside backs Wollongong IT powerhouse VITG as M&A opportunities beckon

Virtual IT Group (VITG), a Wollongong-based managed service provide...

Booktopia extends share trading suspension as critical funding announcement looms

Booktopia extends share trading suspension as critical funding announcement looms

Just as so many Booktopia (ASX: BKG) customers had to wait longer t...