(Corrects paragraph 12 to show investment commitments are
valued in U.S dollars, not Australian dollars)
By Colin Packham
SYDNEY Feb 15 Shares in PrimeAg Australia Ltd
fell a much as 3 percent on Friday after the company
said it will sell 60 percent of its assets for US$123-126
million after traders were left disappointed that the deal was
not a complete takeover, analysts said.
PrimeAg said TIAA-CREF Global Agriculture has agreed to
acquire some of PrimeAg's cropping and livestock properties in
New South Wales at a premium to its book value, but at a "slight
discount to independent valuations."
TIAA-CREF Global Agriculture will buy Crooble aggregation,
the Macintyre Downs, Mullala and Milchengowrie properties, and
has the option to buy either Lower Box and Warra.
"The market assumed it wouldn't be able to get book value
for these assets so it was a good result," said Jordan Rogers,
an equity analyst at Commonwealth Bank of Australia.
Despite analysts' approval, shares fell as much 2.9 percent
before regaining some ground to a slide of 1.65 percent by 0419
Analysts said the market reaction was likely driven by
disappointment that the deal was not a complete takeover and the
sale of PrimeAg's remaining assets could drag on for a year.
Calls to PrimeAg's largest shareholders were not returned.
PrimeAg has embarked on a series of asset sales as it seeks
to delist from the Australian Stock Exchange this year after it
said the market has failed to marry its value with its share
TIAA-CREF has already acquired some of PrimeAg's farm
assets. In May, the fund agreed to a deal worth A$36.7 million
($38.01 million) to buy six farming properties across Queensland
and New South Wales at a discounted rate.
PrimeAg said in a filing to the stock exchange that it is in
talks to sell its remaining assets, both properties and
Traders said PrimeAg's remaining assets may draw attention
from foreign investors, but would likely be more appealing to
local investors due to their smaller size.
TIAA-CREF Global Agriculture has several international
institutional investors and has $2 billion of commitments to
invest in farmland in the United States, Australia and Brazil,
according to the company's web site.
Appetite for Australian agriculture assets by foreign firms
has captured national prominence following the sales of several
notable assets amid concerns Australia food security is being
($1 = 0.9655 Australian dollars)
(Reporting by Colin Packham; Editing by Matt Driskill)