(Reuters) - Australian almond producer Select Harvests Ltd (SHV.AX) said on Monday it has rejected a A$430.6-million ($334 million) takeover proposal from United Arab Emirates sovereign wealth fund Mubadala Investment Company PJSC.
Shares in Select Harvests were up 25.5 percent at A$5.27 after the announcement.
The company said the Mubadala Investment Company offer “undervalued” the company at A$5.85 per share and was also “highly conditional”. The offer was 39 percent above the company’s closing share price last Wednesday, ahead of a halt in trading.
Select Harvest board said the offer was “significantly undervalued” - without offering its own valuation - and also cited regulatory risks, transaction costs and “potentially disruptive” due diligence as other reasons for rejecting the offer.
Mubadala did not say anything particular about the deal, but added it was enthusiastic about the potential of Australia as a market and agriculture as a sector.
“As always, we are continuously assessing promising investment opportunities that align with our portfolio and mandate of diversification,” according to an email from the state fund.
One of the key conditions of the deal also included not paying any further dividends, Select Harvests said.
The company said in a statement that one of the reasons for rejecting the offer was “the requirements to maintain Select Harvests in stasis with no distributions to shareholders or changes in capital structure over an extended period”.
Select Harvests did not rule out the possibility of a revised offer by Mubadala.
In a separate announcement Select Harvests said it would raise A$65 million with a A$45 million share placing at A$4.20 a share and a non-undwerwritten retail share sale plan capped at $20 million.
Proceeds of the share issue would be used to reduce debt following the $26.4 million acquisition of Jubilee Orchards in southern Australia earlier this year, the company said.
Reporting by Rushil Dutta in Bangalore; Additional reporting by Stanley Carvalho in Abu Dhabi; Editing by Greg Mahlich