PrimeAg sowing corporate activity

With PrimeAg putting itself up for sale a fortnight ago, the move looks opportunistic. The 21.5 million share raid was done at less than the company's $1.58 net asset backing per share.

It could also spell the entrance of a likely bidder for the business.

PrimeAg chairman Roger Corbett is travelling overseas and when contacted by The Australian Financial Review said he was unaware of who had bought the stake on Friday. But he did say there had been strong interest in the group.

While the buyer's identity will remain a mystery until a substantial shareholder notice is lodged this week, it's also interesting to know who has sold out and why.

PrimeAg's biggest shareholders, Guinness Peat Group and Australian Food & Fibre have said it was not them. Fund manager Ausbil Dexia did not reduce its stake and is known to be a hopeful of extracting greater value through a takeover.

It is understood JCP Investment Partners has sold down its 6.5 per cent stake, after selling about 4 million shares in the week after PrimeAg's privatisation plan was announced.

The sale reduced JCP's share holding from 21.2 million shares to 17.4 million shares.

There are numerous potential buyers for PrimeAg including the agricultural arm of the US corporate investors WestChester, Global Ag Properties Trust. Chinese group Shandong Ruyi (which makes up 80 per cent of the consortium poised to buy Cubbie Station for more than $200 million) and pension funds such as TIAA-CREF and the $163 billion Canada Pension Plan Investment Board have also been speculated as buyers.

UBS is handling PrimeAg's privatisation but has yet to distribute an information memorandum. 

Opportunistic move.

Opportunistic move.


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