Yet to reach agreement with buyer

Wednesday 9th January 2013

Inghams Enterprises has yet to find a buyer for Australasia's biggest chicken producer, which owner Bob Ingham put up for sale last July with a price tag reportedly of A$1.4 billion.

"We've not agreed to sell the business or got an agreed buyer," Paddy Watts, Inghams financial controller, told BusinessDesk. "We were hoping to have it done by now but it has not got to that stage yet."

"There's people interested in it," he said. "The business will be sold" though it isn't going to happen this week. The process had slowed over the Christmas holiday period, he said.

International Financing Review reported on Dec. 21 that private-equity firm Blackstone Group had dropped out of the bidding, leaving possibly one group still showing interest. Reuters reported in November that Chinese agribusiness company New Hope Group was the other firm to proceed to the final round of bidding for the business.

Others to show interest before withdrawing had included Hong Kong-based Affinity Equity Partners, Bain Capital and KKR while Thailand's CP Foods placed a preliminary bid before withdrawing, Reuters reported.

New Hope has been adding to primary production assets Down Under, and was part of a group with Agria and Ngai Tahu Holdings that teamed up to take a controlling stake in PGG Wrightson, New Zealand's biggest rural services company.

Bob Ingham, who turned 81 last year, hired Investec Bank to manage the sale, which had been expected to take only a few months. He inherited the chicken business from his father in 1953, building an empire that gave him the resources to indulge a passion for horse breeding and training.

Affinity owns Tegel Foods, the biggest chicken producer in New Zealand, and there had been speculation it would have been forced to sell that business, acquired from PEP in 2010 for A$470 million, to satisfy antitrust regulators. Inghams is the number two producer in New Zealand as well as the nation's biggest producer of stock feeds.

The New Zealand unit of Inghams posted its annual results this week. Profit in the year ended June 30 about doubled to $22.96 million from $11.2 million. Sales rose about 5 percent to $336 million. The results showed the company more than halved its administration costs to about $9 million, though gave no details.

Watts said the company wouldn't comment on the results though the New Zealand business was "ticking along fine."

The earnings allowed Inghams Enterprises (NZ) to pay a dividend of $12 million, versus zero a year earlier. It plans to use $50 million of an unsecured loan from its Australian parent to fund a capital return via a share purchase and cancellation, the company said. It gained approval from the Inland revenue Department for the transaction in August.

Inghams employs more than 8,000 people at more than 100 locations across Australia and New Zealand.

(BusinessDesk)

BusinessDesk.co.nz

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