Fay's Crafar bid 'well below' Chinese offer

Photo / Christine Cornege

A group of central North Island dairy farmers, led by entrepreneur Sir Michael Fay, has increased its offer to include all the Crafar dairy farms being managed by receivers KordaMentha.

The group had previously indicated an interest in nine of the 16 Crafar farms. Now more farmers, including local iwi interests, have joined a $171.5 million offer for all 16 farms - an average of more than $28,500 per hectare for the properties - Sir Michael said in a statement.

The offer was tabled with the receivers KordaMentha today.

"Our group of farmers is the only other buyer for all the farms in this sales process and, following satisfactory due diligence, we are ready to go,'' Sir Michael said.

"Due diligence'' is a book-checking exercise that is carried out by interested parties before buying a business.

"As soon as we have a signed deal with the receivers they can hand over the keys and we're ready to walk onto the land,'' he said.

The group's offer was subject to the Overseas Investment Office (OIO) rejecting the current bid from Shanghai's Pengxin International Group, which offered $200m to buy and upgrade all 16 farms in January.

KordaMentha spokesperson Brendon Gibson said the latest offer remained well below Pengxin's bid for the farms.

"As we have said previously, we have accepted an offer from Pengxin International Group Limited which is by far the best offer we have received following a comprehensive sales campaign."

"We continue to await a response from the Overseas Investment Office which we hope to be successful."

Pengxin's bid came after an earlier bid by Hong Kong's Natural Dairy was rejected by the Government, on the OIO's recommendation.

Sir Michael said his group's bid was conditional on the OIO blocking the Pengxin proposal.

About 40 per cent of the group's current offer comes from iwi farming interests. All the farmers in the group have dairy farming interests in the Central North Island region.

- APNZ / NZ HERALD ONLINE