Landcorp fails but Crafar farms stay as one lot

The tender box for the Crafar farms receivership sale - which had more than 50 different bids put in it before the process closed last week. Photo / Richard Robinson

A bid by state-owned Landcorp Farming to buy 16 former Crafar farms has failed but the receivers still plan to sell the properties in one block.

A tender process for the 13 dairy farms and three drystock properties closed last week, although the receivers had already signed a conditional agreement with a bid involving Chinese investors fronted by Auckland businesswoman May Wang.

Receivers Michael Stiassny and Brendon Gibson said yesterday there had been more than 50 offers as part of the tender process for either all or part of the portfolio of farms.

"The receivers regrettably advise that although Landcorp was one of the parties that submitted a tender, its offer was not among the preferred tenderers," a statement said.

Negotiations with preferred tenderers would continue during the coming days.

Speaking to the Herald, Stiassny said: "We were happy with the number of tenderers we got for the full number [of farms], rather than individually so we don't see the break-up as a rational or necessary outcome at this point in time."

Landcorp's bid was one of many that was unsuccessful, Stiassny said.

"It simply wasn't worthwhile negotiating with to get a good outcome," he said. Landcorp's was the only failed bid mentioned by the receivers.

There had been a lot of media attention and comment about Landcorp's ownership and desire to bid, Stiassny said.

"We as receivers are obliged to do what's best for first the appointees and then the creditors and shareholders of the companies we are involved in, " he said.

"And we took this unusual step simply to make it very, very clear to all the commentators and Landcorp that they were not one of those parties and weren't near them."

Landcorp chief executive Chris Kelly said the receivers had called to say they would be issuing a statement.

"I respect their wishes and clearly our bid was less favourable than either another bid or other bids and I guess that's the way it is," Kelly said.

"I know they had a lot of interest in individual farms so it is possible that a syndicate [might buy] them up with the intention of immediately splitting them up and onselling them, that's clearly a personal opinion ... but that could well be an option."

The receivers said in May a sale-and-purchase agreement for the 16 farms had been signed with UBNZ Funds Management conditional on Overseas Investment Office consent and structured so the receivers could accept any better or more favourable offer.

Stiassny hoped there would be competition for Natural Dairy/UBNZ at the end of discussions with preferred bidders.

Graham Chin, vice-chairman of Hong Kong stock exchange listed Natural Dairy (NZ) Holdings, which owns 20 per cent of UBNZ Assets Holdings, said he was confident the purchase of the farms offered the best deal "not only to the receivers and creditors of the Crafar portfolio but to New Zealand in terms of more jobs, increased export revenues, taxation and an overall boost to the agricultural sector and rural industries".

Natural Dairy would engage skilled New Zealanders to manage and run the farms, Chin said.

UBNZ and Natural Dairy last month made an application arguing that a restructured transaction, which included removing UBNZ Funds from the process, did not need OIO consent. The application was dismissed by the High Court but the companies have lodged an appeal.

A court document said the receivers had entered into an agreement to sell the farms to UBNZ Funds Management for $213.2 million, plus stock.

Real Estate Institute president Peter McDonald said if there was the time and ability to market the farms separately the outcome would be better than selling them as a block.

"I wouldn't think there would be too many people or too many groups that could invest that sort of money into dairy farming in one lot."

FOR SALE
* Receivers are selling 16 farms.
* More than 50 offers were submitted.
* State-owned Landcorp Farming was unsuccessful.
* Negotiations with tenderers will continue during the coming days.
* A bid involving Chinese investors has signed a conditional agreement.
* Receivers can accept any offer that is better than the conditional deal.