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Crown pension fund bids for Australian ag firm Webster

Deal will also create new company dubbed KoobaCo; shareholders to vote in early 2020

webster walnut bins

Reuters — Australian agribusiness company Webster Ltd. said on Thursday it has signed a deal for a A$854 million (C$763.65 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 per cent 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.

Based mainly in Montreal, PSP is a Crown corporation investing pension funds for Canadian federal civil servants and members of the Canadian Forces and RCMP.

PSP Investments, which currently holds a 19.1 per cent 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 and Verolot will be given the opportunity to purchase a 50.1 per cent 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,” CEO 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. Agriculture makes up just over half of PSP’s natural resources group’s investments, almost 58 per cent of which are in the Australasia region.

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 for Reuters by Rashmi Ashok in Bangalore. Includes files from Glacier FarmMedia Network staff.

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