Berry nice! Costa board set to sign Paine Schwartz’s lowered $3.20 bid

afr.com:

Australia’s largest fruit and vegetable processor is set to bid farewell to public life.

Street Talk understands Costa Group Holdings’s board, led by Neil Chatfield, is expected to give its blessing to New York private equity investor Paine Schwartz Partners’ revised $3.20 a share bid, after nearly four months of negotiations.

Costa’s board is set to agree to a lowered bid from Paine Schwartz Partners.  

It is understood the two camps were on track to sign an agreed deal at $3.20 a share, valuing Costa at about $1.4 billion.

Documentation was expected to be signed on Thursday evening or Friday morning at the latest. It would pave the way for the scheme vote that Paine Schwartz will require to take Costa off the ASX boards.

It’s been a rollercoaster ride for Costa’s shareholders, who only learnt of the M&A approach when Street Talk revealed the talks in early July. While PSP worked through due diligence, Costa posted disappointing results including a $30 million hit from a deterioration in late-season quality across its citrus business. It also warned of worsening outlook.

Costa told shareholders on Monday that Paine Schwartz, which specialises in agribusiness and food chain buyouts, had signalled that the new bid was the highest it would make.

“[Paine Schwartz Partners] has also indicated that this offer is the best and final price at which the PSP-led consortium can deliver the proposed transaction,” the company said.

Costa is a large grower of berries, mushrooms, citrus fruit, tomatoes and avocados. It operates 7200 hectares of farmland in Australia and also has facilities in Morocco and China.

Citi and Allens are advising Paine. Costa has engaged UBS and King & Wood Mallesons.