Australia's Select Harvests rejects UAE wealth fund takeover offer, shares jump

Australia's Select Harvests rejects UAE wealth fund takeover offer, shares jump”

Shares in Select Harvests, which two weeks ago touched their lowest since 2013 amid continued disappointment at a weather damaged crop, closed up 25% in Sydney at Aus$5.27.

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 of the company jumped as much as 27 percent to A$5.33 after the announcement.

Mubadala was not immediately available for comment on Select Harvests' rejection of its offer.

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.

The deal wouldn't have an impact on Select Harvest's business, including no return on capital or dividends, the company said in a statement.

"It is possible that Mubadala may revise its indicative proposal", the group said, although adding that it had yet to receive a fresh offer.

In Australia, it already has investments in energy businesses OMV and Oil Search.

The $65 million raising - comprising a $45 million institutional placement and $20 million share purchase plan - will be used to reduce debt.

Select told the Australian Securities Exchange that market fundamentals for almonds remained strong with global consumption growing and USA sales up 16pc in the past year, despite increased production.

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