Paine Schwartz Partners (PSP) has revised its offer to acquire Australia’s largest fresh produce business, Costa Group, shaving more than $100 million off its initial offer.
In July, PSP’s indicative proposal $3.50 per share, which it confirmed after four weeks of due diligence valuing the company at $1.6 billion.
On 16 September, it dropped that to a non-binding offer of $3.20 per share as its final price, valuing Costa at $1.49 billion. Costa said that could be reduced if the board decides to pay a dividend of up to 4c a share.
Costa said the board was meeting with financial and legal advisors to consider the offer.
The company’s 1H CY23 results were mixed, with a poor citrus season impacting earnings by around $30 million and the table grape harvest was down 40 per cent on the previous year. Its international business was strong, with EBITDA-S up 43.5 per cent.
PSP acquired 13.78 per cent of the company at $2.60 per share in October 2022, the two companies spoke regarding a potential approach in the range of $3.20-3.30 per share.
PSP said it already has approval from the Foreign Investment Review Board to acquire 100 per cent of Costa, which may need to be refreshed depending on any co-investors.
