Australian (ASX) Stock Market Forum

CGC - Costa Group Holdings

don't know why but have always been a bit cautious about this group , and not just because of the seasonal and weather impact issues ( that will occur from time to time ) which is part of the agriculture business

maybe hitting $2 will persuade me to run the calculator over this .

i see logistics ( and the costs of them ) being a concern right across the sector and maybe the fertilizer shortage will be a mid-term issue as well
 
after falling off a cliff, there appears to be another drop .

CGC now sub $2 ..... reporting that earnings in its citrus category will be “considerably lower” than previously forecast.

And floods in the Victorian foodbowl won't help.
 
after falling off a cliff, there appears to be another drop .

CGC now sub $2 ..... reporting that earnings in its citrus category will be “considerably lower” than previously forecast.

And floods in the Victorian foodbowl won't help.
Driving back thru the Riverina citrus areas last week, I was surprised to see so many citrus trees with fruit till on them.
Other places had blossoms forming for this seasons crop next to unpicked trees.
As one person said in the coffee shop, "Great growing season, but no market, no labor, no hope".
Mick
 
Driving back thru the Riverina citrus areas last week, I was surprised to see so many citrus trees with fruit till on them.
Other places had blossoms forming for this seasons crop next to unpicked trees.
As one person said in the coffee shop, "Great growing season, but no market, no labor, no hope".
Mick
yup. depressing

 
have probably missed the opportunity , but threw in a small buy order sub $2 ( only a dabble , but i need more exposure to the sector , rather than more food retailers )

maybe patience won't be a friend this time
 
have probably missed the opportunity , but threw in a small buy order sub $2 ( only a dabble , but i need more exposure to the sector , rather than more food retailers )

maybe patience won't be a friend this time
I agree with you that eventually this sector will turn IMHO, but it's incredibly frustrating and painful to any trader or investor at the moment to get kicked in the ? again and again !

I think it was luck that we got out with a small profit in the short-term trade in CGC recently in the Speculative Stock Portfolio.

In the farm / fresh produce sector I bought A2M for the Speculative Stock Portfolio recently, but in the current environment it's difficult to hold onto trades as the market has wild swings - usually to the downside ?. A2M is still hanging on by a thread, but when the market turns for the fresh and farm produce companies, trades in the likes of CGC and A2M will stick and become longer term trends hopefully ?
 
I agree with you that eventually this sector will turn IMHO, but it's incredibly frustrating and painful to any trader or investor at the moment to get kicked in the ? again and again !

I think it was luck that we got out with a small profit in the short-term trade in CGC recently in the Speculative Stock Portfolio.

In the farm / fresh produce sector I bought A2M for the Speculative Stock Portfolio recently, but in the current environment it's difficult to hold onto trades as the market has wild swings - usually to the downside ?. A2M is still hanging on by a thread, but when the market turns for the fresh and farm produce companies, trades in the likes of CGC and A2M will stick and become longer term trends hopefully ?
am thinking long term with CGC and the sector , but i missed out today , am looking for industries that should have long term demand ( if well run )

now A2M is still a bit of a puzzler for me NORMALLY milk ( in general ) is facing a demographic issue ( shrinking , aging population ) but will A2M keep the current niche when the climate agenda is trying to cull cattle ( making goat , and camel milk viable natural options )

of course sanity may return , and the Globalists get consigned to their rightful place ( inconvenient moments in history )

now if brave and willing to mess with FX volatility SHV has it's moments of brilliance and disfavor , but then trading usually need your investment cash back sooner rather than sometime down the track ( i had a very nice run with SHV in the past , but dealing with companies earning the majority of their profits from the US ... am not so eager , now )
 
PAINE SCHWARTZ PARTNERS SHARE ACQUISITION

Costa Group Holdings Limited (Costa; ASX:CGC) Australia’s leading grower, packer and marketer of fresh
fruit and vegetables, notes that an entity managed by Paine Schwartz Partners (Paine Schwartz) has
notified the ASX that it has obtained a relevant interest in 13.78% of the issued securities of Costa,
comprising:
 
"Paine Schwartz Partners is a private equity firm specializing in sustainable food chain investing. With a differentiated focus on the global food and agribusiness sector, we leverage a thesis-driven approach and operational expertise to enhance value in each of our investments."

 
will Paine Schwartz Partners keep the holding in their own portfolio or package it in with an investment product ( say , a managed fund )

the spike took CGC out of my target range , am moving on to the next opportunity
 
will Paine Schwartz Partners keep the holding in their own portfolio or package it in with an investment product ( say , a managed fund )

the spike took CGC out of my target range , am moving on to the next opportunity
Well, it filled the gap with the recent rally, but the stock is still in a down-trend and likely to head lower if that trend continues.
 
will Paine Schwartz Partners keep the holding in their own portfolio or package it in with an investment product ( say , a managed fund )

the spike took CGC out of my target range , am moving on to the next opportunity

Paine Schwartz Partners took another bite of the apple. I wonder whether they're planning to take a controling interest.

Paine Schwartz takes another bite into Costa Group’s share registry

Paine Schwartz Partners has lifted its stake in Costa Group after it had raided the register in October last year, amassing a stake of just over 13 per cent.

A substantial shareholder notice to the market revealed that Paine Schwartz now holds 14.84 per cent of the company, up from 13.78 per cent.

When the fund bought into Costa last year, it said it had aspirations to get to 15 per cent. It is understood that the group has been capitalising on Costa’s weaker share price of late.

Shares last week were trading below $2.30, but the company’s stock on Thursday closed up 6c at $2.52, taking its market value to $1.1bn.

The group is not thought to have any short-term plans to launch a buyout proposal, but it is expected over time that an acquisition of the fruit and vegetable grower is within its sights.

In December, Paine Schwartz was trying to buy a stake at a price of up to $2.60 a share through direct and financial interests via investment bank Citi.

The price at the time was a 16.6 per cent premium to Costa’s closing pricing of $2.23.

The New York-based company, previously called Paine & Partners, said at the time that it had no current intention to bid for Costa, but was keen to gain a board seat, subject to Foreign Investment Review Board approval.

Paine & Partners owned Costa with family founders before Costa was listed in 2015 at $2.25 a share, equating to a $717m market value.

Costa’s share price had been under severe pressure after flooding affected its citrus crops, after facing pricing pressure from a glut of avocados in the market.

Higher labour costs have also been weighing on its bottom line, and last year it issued a profit downgrade.

Costa is Australia’s largest grower, packer and marketer of fresh fruit and vegetables, supplying produce to supermarket chains as well as independent grocers and a range of food industry stakeholders.

The business also exports to Asia, North America and Europe, growing produce including berries, mushrooms, tomatoes, citrus, table grapes, bananas and avocados.

BRIDGET CARTER DATAROOM EDITOR
 
Any coincidence that the SP is up 6.9% with the Global Food Forum on today?

Global Food Forum

Beyond Borders: How to profit in a changing world

The 2023 Global Food Forum in partnership with Visy and supported by the Wall Street Journal, will return to Melbourne on May 25, 2023.

Join us for this year's Global Food Forum, where we'll delve into the crucial issues that are shaping the future of Australia’s $150 billion agribusiness sector. Against a backdrop of tumultuous global trade in recent years, the forum seeks to uncover how Australia can take advantage of the current wave of global opportunities that are presenting themselves.

The Global Food Forum will bring together a world-class lineup of industry experts to debate and discuss the key challenges facing Australian agribusiness today.
 
Any coincidence that the SP is up 6.9% with the Global Food Forum on today?
Hi JohnDe
In AGM Chairmans address today, investors were told that the international operations are on track for an improved performance and plenty of other stuff. Have attached the document.

Have a nice night.
Not holding.

Kind regards
rcw1
 

Attachments

  • AGM-addresses-with-trading-update.PDF
    2.5 MB · Views: 9
Hi JohnDe
In AGM Chairmans address today, investors were told that the international operations are on track for an improved performance and plenty of other stuff. Have attached the document.

Have a nice night.
Not holding.

Kind regards
rcw1
Hi rcw1, more on the Costa price rally -

IMG_0128.jpeg
 
Yesterday's paper -

Paine Schwartz bids for Costa Group

Fruit and vegetable grower Costa Group is understood to have fielded a $1.2bn-plus buyout proposal from Paine Schwartz Partners, after the former owner of the business has been creeping up its register.

It comes after Paine Schwartz Partners lifted its stake in Costa Group in March on the back of a raid on the register in October last year, amassing a stake of just over 13 per cent.

A substantial shareholder notice to the market revealed that Paine Schwartz held 14.84 per cent of the company, at March, up from 13.78 per cent.

When the fund bought into Costa last year, it said it had aspirations to get to 15 per cent.

But now a buyout proposal is understood to have landed, with the company yet to recommend an offer.

Shares on Friday closed at $2.72 and on Monday at $2.96, taking its market value to $1.26bn.

Shares in March were trading at below $2.30.

In October, Paine Schwartz was trying to buy a stake at a price of up to $2.60 a share through direct and financial interests via investment bank Citi.

The price at the time was a 16.6 per cent premium to Costa’s closing pricing of $2.23.

The New York-based company, previously called Paine & Partners, said at the time that it had no current intention to bid for Costa, which has counted UBS as its long-time adviser, but was keen to gain a board seat, subject to Foreign Investment Review Board approval.

The expectation around the market since then has changed.

DataRoom reported in May that Costa was back in focus for a takeover, and that Paine may partner with Driscoll’s for a deal, with the pair considering a buyout together in 2020.

Paine & Partners owned Costa with family founders before Costa was listed in 2015 at $2.25 a share, equating to a $717m market value.

Costa’s share price had been under severe pressure after flooding affected its citrus crops, it faced pricing pressure from a glut of avocados in the market and suffered from higher labour costs, but cost pressures have since eased and international earnings are increasing, the company told the market in May.

Costa is Australia’s largest grower, packer and marketer of fresh fruit and vegetables, supplying produce to supermarket chains as well as independent grocers and a range of food industry stakeholders.

The business also exports to Asia, North America and Europe, growing produce including berries, mushrooms, tomatoes, citrus, table grapes, bananas and avocados.

The bid will be welcomely received by deal makers in the market hoping for a pick up in activity amid a major lull.

Investment bankers on Monday were keen to talk up the result of the initial public offering debut of Redox.

Despite the stock closing down 5 per cent on its first day of trade to $2.42, it was not the disastrous foray that Chrysos Corp made a year ago where it finished the first day of trade down more than 35 per cent and shut the IPO market.

Only about $10m of Redox shares changed hands in a quiet market, but some fund managers are sceptical that the deal demonstrates the market is open for business for other floats by December.

Yet bankers eager to see more activity are hopeful the result was good enough to urge other groups to hit the boards.

Not helping the Redox result was that only a 30 per cent holding was sold down, creating a limited free float and inhibiting liquidity.

The Wall Street Journal reported that two private equity floats in the United States this week showed that the signs the market had opened, at least a crack.

BRIDGET CARTER DATAROOM EDITOR

Today's announcement -

COSTA GROUP CONFIRMS RECEIPT OF NON-BINDING INDICATIVE PROPOSAL FROM PAINE SCHWARTZ PARTNERS

Costa Group Holdings Limited (Costa; ASX:CGC), Australia’s leading grower, packer and marketer of fresh fruit and vegetables notes recent media speculation in relation to a proposal to acquire Costa Group by Paine Schwartz Partners.

Costa confirms that on 31 May 2023, it received an unsolicited, confidential, non-binding indicative proposal from Paine Schwartz Partners, LLC (PSP) to acquire all of the issued shares in Costa which it does not already own by way of a scheme of arrangement (Indicative Proposal).

Under the Indicative Proposal, Costa shareholders would receive cash consideration of $3.50 per share1 with Costa shareholders also entitled to any interim dividend declared in relation to the 6 month period which ended on 2 July 2023 of up to 4 cents per share. Following a 4-week period of initial due diligence, PSP provided reconfirmation of the Indicative Proposal on 4 July 2023.

The Indicative Proposal followed PSP acquiring a 13.78% relevant interest in Costa on 25 October 2022 at a price of $2.60 per share, and subsequent verbal engagement between Costa and PSP in April in relation to a potential approach at a range of $3.20 to 3.30 per share.

The cash consideration under the Indicative Proposal (exclusive of any dividend) would represent a 34.6% premium to the price of $2.60 at which PSP acquired a 13.78% relevant interest in Costa on 25 October 2022.

The Indicative Proposal (as reconfirmed) is subject to a number of conditions including satisfactory completion of due diligence, execution of a binding scheme implementation agreement and approval of the PSP Investment Committee. PSP has indicated that they have received approval from the Foreign Investment Review Board to acquire up to 100% of the shares in Costa, however such approval may be required to be refreshed upon finalisation of any co-investors.

The Costa Board, together with its financial and legal advisers, carefully assessed the Indicative Proposal when received and determined it was in the best interests of shareholders to grant PSP an eight-week period of non-exclusive due diligence to enable PSP to determine whether to put forward a binding proposal. The due diligence period commenced on 6 June 2023.

Notwithstanding recent media speculation that Costa and PSP were hopeful of an agreed deal in coming days, further due diligence and negotiations on a potential scheme implementation agreement are expected to continue through July. There is no certainty that the Indicative Proposal will result in a binding offer or that any transaction will eventuate.

Costa shareholders do not need to take any action at this time in relation to the Indicative Proposal. Costa will continue to keep the market informed in accordance with its continuous disclosure obligations.

UBS Securities Australia has been appointed as financial adviser and King & Wood Mallesons as legal adviser.
 
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