TASFOODS has settled its legal dispute with the owners of Van Diemens Land Company, over its failed bid to buy the country’s largest dairying property.
In a statement to the ASX, TasFoods announced it had reached a settlement agreement with the current owners of VDL, New Zealand’s New Plymouth District Council (NPDC). TasFoods will get cash compensation of $1.25 million. The company told the ASX, due to the uncertainty over the sale, its board had decided the ‘‘agreement to acquire VDL had diminished’’.
The board was conscious continuing with litigation would cost considerable costs and management time, that could be better spent elsewhere. TasFoods took NPDC to court for compensation after the failed in their bid to buy VDL, after intially being announced as the winning bidder.
By late November NPDC announced it had been negotiating with a separate company, Chinese owned Moon Lake Investment, which would purchase VDL instead for $280 million.
Chinese investor Lu Xianfeng, the sole operator of Moon Lake investment will buy the company subject to a decision by the Foreign Investment Review Board, which is expected to announce its decision at the end of the month.
Melbourne based Investment banking firm, KidderWilliams has had a long involvement with VDL and director Tim Faulkner said the sale, to the Chinese, appeared to be a good thing.
“VDL to be really optimised, needs further money spent on it to really develop it - probably another $150-200 million to build new farms, new capacity for water and feed.” Mr Faulkner said.
“I think it will be a fantastic thing for the local community down there and Tasmania as a whole.
“It needed an owner that had the money to spend on it to develop it – I think the Chinese look like the most obvious party to do that.”
Mr Xianfeng has said he believes the true potential for VDL resides in its environmental, heritage and brand values. “We are committed to proceeding with the acquisition from NPDC of the Tasmanian dairy assets held by Tasmanian Land Company Ltd,” Mr Xianfeng said.
Mr Xianfeng said Moon Lake had been told the NPDC would not progress the “unsolicited and non-binding offer” from Tasmanian businesswoman, Jan Cameron.
“I am told that the vendors were open to firm offers for all or a part of VDL for up to three years – and, apart from the Moon Lake bid, there has been no other binding offer, either before or after our bid, that covered the farms’ market values,” Mr Xianfeng said. It was only logical the seller would accept the strongest offer, with the best terms and certainty of financial capability of the buyer to complete the transaction.
He said Moon Lake would also offer local Australian participation of up to 50 per cent, in ownership of VDL, once the acquisition was completed.
