Takeover bid for Costa Group

11th Jul 2023

The Costa Group, Australia's largest fresh fruit and vegetable grower and owner of the Guyra Tomato farm, could be in American hands within months following a takeover bid by Paine Schwartz Partners (PSP).
The Costa Group last week confirmed it has received a takeover bid from the US private equity firm.
PSP’s indicative proposal gave shareholders $3.50 per share plus any interim dividend declared in relation to the six-month period ending 2 July of up to four cents a share. The New York firm reconfirmed its offer after four weeks of due diligence.
Meanwhile, following PSP’s proposal, Costa said its board, financial and legal advisors decided it was in the best interest of shareholders to grant PSP an eight-week timeframe for non-exclusive due diligence, which began on 6 June.
Costa said that after PSP acquired 13.78 per cent of the company at $2.60 per share in October last year, the two spoke regarding a potential approach in the range of $3.20-3.30 per share.
It said that the proposal’s cash consideration, excluding any dividend, is a 34.6 per cent premium to the price PSP paid in October 2022.
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.