Synlait Farms Limited (SNLF)

[FarmerHamilton]

FH, what service/website do you use to buy and sell options? Thx

www.interactivebrokers.com

[1leon]

Whilst I can appreciate Farmer Hamilton is happy to exit after a longer innings, as a holder for only 5 months I am disapponted that the only opportunity for a stand alone dairy farm interest looks likely to disappear under my nose with only the two principal directors hanging on to their interest in the new set up. It is the more disappointing that it is occurring as things look much better--Sylait Farms last accounts were on $5.8 a kg when the projected return for the current year is currently of the order of $8 kg. Fran O'Sullivan in NZ Herald took NZ investors to task for shunning Synlait in 2009 ignoring the fact that the offer was pulled and a totally different offer made to the overseas investors i.e. excluding the farms. Now we are again having overseas interests tying up Synlait Farms with no opportunity for local investors to show an interest. I find it extremely difficult to believe that there would not be substantial interest in a listed dairy farm operation. If there are other holders following this thread who would prefer to retain an interest I would be interested to hear.

[GTM 3442]

Good morning Ileon.

No, you're not alone.

I too would have welcomed the chance to continue to hold SNLF.

I too would really like a way to access the NZ dairy industry.

I am disappointed that I will end up being compulsorily bought out at such a low price.

P*ssed off.

[FarmerHamilton]

Good morning Ileon.

No, you're not alone.

I too would have welcomed the chance to continue to hold SNLF.

I too would really like a way to access the NZ dairy industry.

I am disappointed that I will end up being compulsorily bought out at such a low price.

P*ssed off.

$2.10 is not " a low price " based on current NTA. But I agree if you see many seasons where were have $8kgMS payouts then no doubt farm values will ratchet higher and the current NAV may seem cheap by say 2016/2017.

[1leon]

1. We do not have the current nta--at best the valuation is at 31 May 2013. By the time the takover offer is made it will be 6 months out of date.In the same time Fonterra's forecasts have increased exponentially the most recent being $8.62 this month.Somehow I doubt any dairy farmer wishing to sell will feel constrained to wait sveral seasons to push up his asking price.
2. Synlait is also a business of scale rather than a collection of assets. It is interesting to compare Skyline also on Unlisted and with substantial property holdings particularly prime Queenstown but also elsewhere has just traded at $9.75 against its last asset backing of $6.33- a premium of 54%
3.With last years production of 5.31m kg the bottom line can improve $15m on forecast payout alone.
4.My quibble is less with price than inevitable sale-- even if the price were fair I would prefer to stay there and I would prefer to see NZ investors get first chance.

$2.10 is not " a low price " based on current NTA. But I agree if you see many seasons where were have $8kgMS payouts then no doubt farm values will ratchet higher and the current NAV may seem cheap by say 2016/2017.

[Armillary Private Capital]

Trading halted until further notice:

http://www.unlisted.co.nz/uPublic/un...cement_id=2298

[Armillary Private Capital]

Takeover offer documents posted:

http://www.unlisted.co.nz/uPublic/un...cement_id=2309

[FarmerHamilton]

Takeover offer documents posted:

http://www.unlisted.co.nz/uPublic/un...cement_id=2309

Best estimate by Synlait Milk is now a ...................... $9.00 .............. payout for 2013/14

Hard to sell at $2.10 now !!

The $2.10 takeover is " fair value " if you assume average milk payout going forward is about $6.90 ... so not exactly generous

Might not accept offer now .... ????

[Armillary Private Capital]

Shareholder presentation on the offer:

http://www.unlisted.co.nz/uPublic/un...cement_id=2312

[1leon]

AGRIHQ.CO.NZ 14/11/13.
An irrigated 129ha North Canterbury farm has sold at auction for $6.7 million, or $52,300 a hectare, a record price for a North Canterbury dairy farm.
PGG Wrightson Christchurch agent Peter Crean said Gairloch, sold by his colleague Athol Earl, was converted to dairy in 1995 and has milked about 450 cows, with production peaking at 188,000kg milksolids last season.
“We have a strong board of motivated buyers at present with few local dairy properties of this calibre available, so it was no surprise that the sale achieved such a positive result,” Crean said.
Five bidders took part in the auction and the room was full of others including bankers, farm valuers and neighbours, he said.
“Bidding was spirited, with local farmers and syndicates from elsewhere in the country entering into keen competition.

Compared to this $52300 per hectare Grant Sammuel suggests it is appropriate to discount the Company's May 2013 nta of $44824 a hectare by 10% for delay in realisation and costs of sale. It seems the buyers are there and rather than discount the valuation needs to be updated and there would be a counter argument that any buyer wishing to acquire 13 farms would have considerable difficulty and delay i.e. he should pay a premium not discount.Applying the latest sale price would increase the total nta by $29,462,916.