Wednesday, February 15, 2017

Farmland: "Black Earth Farming unveils $200m sell-out to Russian buyer"

From Agrimoney:
Black Earth Farming revealed it had agreed, in essence, a $200m takeover by a Russia's Kukura family in the most high profile of a series of retreats by foreign investors from the Black Sea agricultural market.
Stockholm-listed Black Earth Farming, one of the biggest foreign-controlled farming groups in Russia, said it had agreed a sale of its operating companies to Volgo-DonSelkhozInvest, owned by the Kukura family, which is best known for its links to oil and gas giant Lukoil.
The sale, valued at $200m including debt, is aimed to be followed "as soon as practically possible" with the liquidation of Black Earth Farming, and the distribution of deal proceeds to shareholders, who are expected to receive SEK7.2-7.5 per Swedish depository receipt.
That offers a premium of a modest 7.5-11.9% to the share price as of Friday's close, but "corresponds to a premium of between 97-105% compared to the volume weighted average trading price for the three months" ahead of an announcement in August that it was in talks with Russian investors.
The shares closed on Monday at SEK6.80, a gain of 1.5% on the day.
'Better alternative'
In fact, the August announcement said that Black Earth Farming was in talks over a "substantial land and asset sale", with suitors including sugar-too-oilseeds agricultural company ASB Group, which is also centred on Russia's Central Black Earth region.
However, "having evaluated an asset sale versus other alternatives", Black Earth Farming said the deal being proposed "is a better alternative for… shareholders than continued long-term operations".
Per Åhlgren, the Black Earth Farming chairman, said: "Having evaluated this transaction and the alternatives, including continuing running the business, we are convinced that the sale to Volgo-DonSelkhozInvest offers the best value for all of our shareholders."...