US private equity firm Paine Schwartz Partners, which floated Costa Group in 2015, has acquired a 15 per cent stake in the Australian fresh produce business.
Stockbroker Citigroup Global Markets Ltd (Citi) was acting on Paine Schwartz’s behalf, offering investors $2.60 a share. Citi said the PE firm had no intention of making a take-over bid for Costa, and would need Foreign Investment Review Board (FIRB) approval once it moved over a 9.99 per cent holding.
Citi’s term sheet said, “At this stage, the shareholding is seen as a long-term investment and the aquirer has no current intention of making an offer to acquire control of CGC.”
It may seek a seat on the board once FIRB conditions were satisfied.
Costa downgraded its earnings guidance last week after the poor performance of its citrus crop, causing a 15 per cent share price drop.
Paine was looking to acquire a 9.99 per cent direct stake, 2.38 per cent in a total return swap with Citi and enter a forward agreement with the broker for another 1.41 per cent subject to no objections under the Foreign Acquisitions and Takeovers Act.
