Landcorp confirms bid for Crafar properties

Landcorp chief executive Chris Kelly. Photo / Mark Mitchell

State-owned Landcorp Farming has thrown its hat into the ring to buy 16 farms from the receivers of the Crafar empire.

Landcorp chief executive Chris Kelly said the board supported a recommendation by management to place a bid for the farms.

"It's fair to say that the decision was unanimous, the business case made a reasonably compelling commercial argument."

Interested parties have until 4pm tomorrow to place a bid for the properties, which include 13 dairy farms and three drystock properties, with projected production for the 2010/11 season of 4.9 million kilograms of milksolids.

"I'm not absolutely confident ... we've had the farms valued and in my opinion we're going to offer a realistic valuation. Whether it's high enough or not, who knows," Kelly said.

Receivers Michael Stiassny and Brendon Gibson in May said a sale and purchase agreement for the portfolio of 16 farms had been signed with UBNZ Funds Management conditional on Overseas Investment Office (OIO) consent and structured so the receivers could accept any better or more favourable offer.

Graham Chin, vice-chairman of Hong Kong stock exchange-listed Natural Dairy (NZ) Holdings - a 20 per cent shareholder of UBNZ Assets Holdings - said an application was likely to be lodged with the OIO yesterday afternoon.

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.

This was dismissed by the High Court but the companies have lodged an appeal.

No further comment would be made while the matter was before the court, Chin said.

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

"In reaction to Landcorp's confirmation that it will lodge a bid for the Crafar properties, Natural Dairy points out that, at best, will only be a backup bid as Natural Dairy has a signed purchase agreement with the receivers for the properties, subject to OIO approval," Chin said. "Natural Dairy is confident the OIO will follow fair and due process given the compelling benefits to New Zealand from the purchase."