New Farming Systems offer

Krishnan Venkataraman and Vivek Verma of Olam International. Photo / Steven McNicholl

Singapore-based Olam International is launching another takeover bid for NZX-listed NZ Farming Systems Uruguay but one farmer shareholder has already said the price is not enough.

Olam said it intended to offer 70c each for all the shares it did not already hold in the company, which was set up by PGG Wrightson to develop dairy farms in Uruguay.

Olam already owned 78 per cent of the company after a successful takeover bid last year - also made at 70c a share - during which it said it was happy to have a significant Kiwi shareholding and keep it listed in New Zealand.

The new offer provided shareholders a chance for a significant premium to market prices, to sell shares in volume and before they were called upon to take part in any rights issue or face being diluted, Olam said.

NZ Farming Systems shares closed up 15c yesterday at 70c - a rise of 27 per cent.

The company in February said it expected to raise US$100 million ($124 million) to US$110 million of capital within six to 12 months to fund an updated business plan, capital expenditure and repay an Olam shareholder loan.

NZ Farming Systems made a net loss of US$6.8 million for the six months ended December, with revenue of US$18.9 million up 72.3 per cent on the previous year.

The updated plan was expected to generate a positive net profit in the 2012-2013 year.

Forsyth Barr analyst John Cairns said there were costs in maintaining a listed entity, limited liquidity "and from what I gather Olam is in a position to fund the development in its own right".

"There is a significant capital raising ahead of the company and ... rather than having to go through that whole process and have the details of their strategic plan released it could be that they prefer just to keep it in house," Cairns said.

Cairns understood a number of the remaining shareholders were Taranaki dairy farmers.

"They've already been given an opportunity to get out, perhaps they will reconsider their position in light of the [potential] capital raise," he said.

Taranaki dairy farmer Rob Poole said the offer of 70c a share did not appear to recognise a fundamental improvement in the business in Uruguay and the market generally since the previous takeover offer.

Poole, who controls 1.8 million of the company's shares with Clare Poole, said the offer was not good enough, because Uruguay had experienced the same lift in dairy prices as New Zealand.

"As a consequence, dairy cow and land prices have increased."

Operational performance had improved under Olam's management but the 70c a share offer did not reflect this, he said.

The offer was being made before shareholders were informed by the full- year result and annual report, which would revalue both land and livestock at balance date.

- additional reporting by NZPA