The New Plymouth District Council has bought a fight with TasFoods after cancelling the sale of Australia's largest dairy supplier, which the district council owns, in favour of a foreign buyer that emerged after a sale to TasFoods had been announced.
The New Plymouth District Council has bought a fight with ASX-listed TasFoods after cancelling the sale of Australia's largest dairy supplier, which the district council owns, in favour of a foreign buyer that emerged after a sale to TasFoods had been announced.
TasFoods shares more than halved after the company obtained an interim injunction from the Supreme Court of Victoria blocking New Plymouth District Council's investment arm from selling the Tasmanian-based Van Diemens Land farms to the unnamed foreign buyer.
On Friday, New Plymouth mayor Andrew Judd said the council had received a "significantly superior" offer to buy the farms, the terms of which were subject to commercial confidentiality. That scuttled a $A250 million bid from TasFoods, formerly known as OnCard International, which would have seen Taranaki Investment Management, the perpetual investment fund owned by the council, take a 19% stake of the ASX-listed company.
In a statement to the ASX, TasFoods said it was notified of the council's decision to terminate and understood the successful bidder offered a price "less than the value of the consideration agreed to be paid by the company," including the current share price. It has filed an interim injunction restraining the sale of the Tasmanian dairy farm business, Van Diemen's Land Co, until Wednesday when the court will hear the matter. The shares sank 56% to 30Ac at the ASX open today.
"The directors consider it an extraordinary decision by the councillors of New Plymouth District Council to have approved a sale of the VDL assets to a foreign investor for less consideration, particularly when that sale is subject to the approval of the Foreign Investment Review Board," TasFoods said. "The company is also taking legal advice as to its other remedies and rights of redress against TLC (Tasmanian Land Co) and the New Plymouth District Council and its officers and other representatives."
TasFood planned to sell up to 976 million shares at 25Ac apiece, raising $A244 million toward the purchase, and its shares had soared to 68c on the prospect of the deal. Shareholders are scheduled to vote on whether to back the deal on December 18.
The Melbourne-based company said it has retained Allan Meyers QC and Andrew Broadfoot as counsel, instructed by law firm Norton Gledhill.
(BusinessDesk)
