Primewest has confirmed it will support the sale of Vitalharvest Freehold Trust to Macquarie Group.
Under the terms of the deal, first proposed earlier this month, the Sydney-based firm will either pay $1 per unit to acquire the trust, or $300 million to acquire it outright if the trust scheme fails to gain shareholder approval.
At least half of those who hold an interest in the trust who do not hold an interest in Primewest will need to support the move for the $1/unit trust scheme to go ahead.
Primewest will receive an $8 million fee if the trust scheme goes ahead.
Managing director David Schwartz confirmed the group would support the proposed transaction this morning.
“Upon acquiring the manager of VTH, Primewest sought to reduce the variability in earnings associated with the current VTH leases,” he said.
“However, there was no certainty that this strategy was achievable in a suitable timeframe whilst the MIRA Proposal provides cash certainty to all investors at a material premium to the price of VTH units.
“As such, in the absence of a superior proposal, Primewest intends to vote in favour of the MIRA proposal.”
VTH’s board has also said it will support Macquarie’s proposal, and Costa Group, which leases the berry and citrus farms owned by the trust, has reportedly provided conditional support to the sale, saying it would be comfortable if Macquarie’s bid was successful.
Primewest, which listed on the ASX about 12 months ago, acquired VTH’s external management and largest shareholding in June for $30 million, ostensibly as part of an effort to boost the group’s holdings of rural properties.
Mr Schwartz reiterated today that Primewest would continue to seek opportunities in the agricultural space, saying the group remained committed to its unlisted agricultural fund it established in April.
Primewest was trading at $1.13/share at 3:30pm AEDT.