Select Harvests receives takeover proposal, prepares raising
Select Harvests was shoring up its first line of defence on Thursday afternoon.
Street Talk can reveal the almond grower and nut products manufacturer has received a conditional takeover proposal from an entity controlled by the Abu Dhabi Investment Authority (ADIA).
It is understood the details of the approach will be revealed in a cleansing statement alongside a $40 million placement as early as Friday.
As this column first reported on Wednesday, Select Harvests has been in the crosshairs of some of the world's biggest sovereign wealth funds and offshore agricultural investors, with $US800 billion money manager ADIA among parties considering a tilt.
The Kidder Williams-advised Select Harvests is expected to launch the long-awaited capital raising as part of its defence.
Bell Potter Securities, PAC Partners and Select Equities will manage the placement, with the offer price pegged at about $4.20 a share.
At its annual results, the company said current debt levels were "at the top of the targeted range."
Net debt was $104.4 million as at June 30, 2017, up from $25.5 million a year earlier. Net debt, including finance leases, climbed to $145.8 million, taking gearing to 52.5 per cent.
The stock has been hovering at 18-month lows after plunging 40 per cent this year.
Should a credible takeover proposal be forthcoming, hedge funds that have enthusiastically bet against the stock will face a potentially brutal short squeeze.
Select Harvests is the seventh most shorted stock in the market, based on the percentage of total shares shorted.
Shares in the Paul Thompson-led company were placed in a trading halt on Thursday morning.
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