Canadian fund launches bid for Webster

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Almonds are a key part of Webster's portfolio.
North Queensland Register | 3 October 2019

Canadian fund launches bid for Webster

Gregor Heard

CANADIAN investors' obsession with Australian agriculture continues with agribusiness Webster Limited the latest to attract an offer from Canadian buyers.

Fund manager PSP Investments, a public service pension fund, has put in an offer for Webster that values the diversified agribusiness at $854 million.

It has sent shares in Webster Limited soaring, up 66 cents, or 51 per cent, to $1.93.

The takeover proposal comes about a month after Ruralco shareholders overwhelmingly voted in favour of a $469 million takeover by Canadian fertiliser giant Nutrien - which already owns the Landmark brand in Australia.

Canadian pension funds, such as the Ontario Teachers Fund, have also been active buyers of Australian farmland in recent years.

Webster has encountered controversy around its cotton operations following reports that received money from a government water infrastructure scheme that allowed it to expand its irrigation capacity.

Along with its cotton business it also operates almond and walnut operations in NSW and Tasmania , a broadacre cropping enterprise and a livestock business.

A portfolio of water entitlements is also an important part of the business.

Webster, which has significant holdings in far western NSW, has been hit hard by the ongoing drought, with net profit dropping 46pc to $2.1 million in its half year results earlier in the year.

For its part, PSP Investments has been drawn to Websters, which it describes as a 'high class asset'.

Marc Drouin, PSP Investments managing director said Webster was complementary to the company's existing business, which has over 57pc of its agricultural and timber investments in Australasia.

"The Webster acquisition is highly complementary to our existing joint ventures with on-the-ground operating partners in Australia," Mr Drouin said.

"We see this investment as a unique avenue to scale our Australian investments in each of permanent crops, row crops and livestock."

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Reuters | 3 October 2019

Australia's Webster agrees $572 million buyout by Canadian pension fund

(Reuters) - Australian agribusiness company Webster Ltd (WBA.AX) said on Thursday it has signed a deal for a A$854 million ($572.52 million) takeover by shareholder PSP Investments, one of Canada’s biggest pension funds.

The walnut, cotton and livestock producer said the A$2 per share offer - a 57.5% premium to Wednesday’s ordinary shares closing price - offered immediate benefits to shareholders “without the inherent risks associated with agricultural enterprises.”

The deal will close in early 2020, subject to shareholder approval.

PSP Investments, which currently holds a 19.1% stake in Webster, will acquire all the ordinary and preference shares in Webster that it does not already own via its subsidiaries PSP BidCo and Sooke Investments Inc.

Under the deal, Webster will then transfer some assets to a separate, newly formed PSP Investments group entity, to be called KoobaCo. Existing shareholders Belfort Investment Advisors Ltd and Verolot Ltd will be given the opportunity to purchase a 50.1% interest in that new company.

Given the intricacies of the deal, Webster formed an independent committee of two directors not associated with any of the funds to consider the proposal.

“PSP Investments has a proven track record in managing and investing in agricultural assets over the long term for sustainable value creation,” Chief Executive Maurice Felizzi, one of the two non-conflicted directors, said in a statement.

Through its Natural Resources group, PSP Investments invests globally in agriculture, timberland and related opportunities via direct investments. In 2015, it took a major stake in Australia’s Hewitt Cattle company.

Webster plans to hold a shareholder meeting to vote on the proposal in early 2020.

The company reiterated its forecast of breakeven financial results this year, due to continued drought conditions.

Reporting by Rashmi Ashok in Bengaluru; Editing by Leslie Adler and Jane Wardell
Original source: N Queensland Register
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