Elders' sandalwood asset sale upsets rival
A company pursuing the sandalwood assets of agribusiness Elders has likened a rival acquisition proposal to be put to growers to a "shotgun wedding".
Elders has agreed to sell Indian sandalwood plantations in Western Australia's Ord River region to Santanol for an undisclosed sum.
It is thought Santanol, an owner and manager of sandalwood plantations, will pay $70 million for trees in 15 managed investment schemes.
Investment firm Hamilton Securities is putting together a proposal of its own to acquire the sandalwood assets but is not in a position yet to submit a proposal.
The agreement between Elders and Santanol is subject to the approval of growers in Elders' sandalwood investment schemes. They will vote on the Santanol proposal on March 14.
"It just feels like a shotgun wedding," Hamilton Securities executive director Giles Craig said, adding the Santanol proposal undervalued the assets.
Elders is in the process of exiting from or selling all its assets and is unlikely to have any ongoing business activities after this year.
Mr Craig expected the growers' vote later this week to be close.
"All we can do is say: if you [the growers] want to accept the bird in the hand, then do so but recognise it is a very small bird," he said.
Hamilton Securities will not proceed with its proposal if growers vote in favour of the Santanol offer.
"The Santanol transaction represents the most attractive option and best available option for growers to realise value for their project trees," Elders said.