March 2, 2015

Australia’s fourth oldest company, walnut business, Webster Ltd, has announced intrepid plans for a $200 million takeover of farming and water trading business Tandou, and Prime Ag’s Bengarang farming aggregation.

Devonport-based Webster currently has a capitalization of $200 million and 2,200 hectares of walnut orchards in New South Wales and Tasmania, and once completed, this Tandou deal would see Webster doubling its asset base and gaining control of one of Australia’s largest water entitlement portfolios in excess of 235,000 megaliters, valued at approximately $300 million, and 40,000 hectares of irrigated cotton land.

The offer from Webster would value the Tandou business at $114 million and involves swapping one Webster share for every 2.25 Tandou shares representing a 10.5 cent per share premium on Tandou’s closing price on Friday, February 27.

Confirmation of the takeover offer comes close on the heels of Tandou posting a 96% fall in profits to $101,000 for the six months to December 31, 2014, and as the company’s farming business’ earnings before taxes and depreciation lost $2.48 million as water reserves in the lake system diminished. In light of these developments, unless a counter offer is received, Tandou directors are recommending shareholders accept Webster’s offer. Webster has made a point of reassuring shareholder of its continued commitment to tree crops, and is dedicated to forward growth in walnuts, as it plans to complete the development of its new 900 hectares of orchards near Griffith next year.

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