Saudis in £61.5m bid for Continental Farmers company

Continental Farmers, the Aim-quoted agriculture company founded by Scottish farmer Mark Laird, is being taken over in a £61.5 million Middle Eastern deal.

The Aim-quoted company, which owns farming interests in Poland and Ukraine and in which Sir Malcolm Rifkind has a stake, has recommended the bid by Saudi Arabian-based United Farmers Holdings (UFH).

Forfar-based Laird, who founded the company in 1994 and is chief executive, is in line to receive around £4.4m for his stake.

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UFH has been set by a consortium including the Saudi royal family as part of a strategy to help secure food supplies for the kingdom.

Under the terms of the offer, Continental Farmers’ shareholders will receive 35p in cash for each share and up to a further 2p in deferred consideration.

The deal represents a premium of 50 per cent to the closing price on Thursday.

UFH has undertakings and a letter of intent to accept the offer covering around 71.7 per cent of the shares of Isle of Man registered Continental Farmers which produces oil seed rape, sugar beet, potatoes, wheat, and maize. Continental Farmers only floated 20 months ago with a placing price of 23p and chairman Nick Parker, said the deal represented an “attractive premium for shareholders”.

“Under Mark Laird’s leadership, Continental Farmers has developed an outstanding farming platform, which is reflected in the offer that we have received.”

He said the deal would give the business “access to substantial capital and to the expertise of the members of the consortium in the international agribusiness sector”.

UFH said it planned to retain the current management and staff of Continental Farmers which was set up by Laird with the backing of a number of Scottish and Irish investors to build up farming interests across western Ukraine and northern Poland which offer relatively low costs and a favourable climate.

Rifkind, a Tory MP and former foreign secretary, is the company’s senior independent non-executive director and owns 30,000 shares.

Other shareholders include Aim-quoted Irish-based agriculture group Origin Enterprises, which owns around 24 per cent of the company.

Edinburgh-based fund manager Artemis owns 8.2 per cent of the company.

News of the recommended offer yesterday came as Continental Farmers also issued results for 2012 which showed Ebitda earnings increased by 9 per cent to €7.3m (£6.18m) with group revenues increasing by 23 per cent to €30.7m.

Laird, 39, said the company’s strategy of farming a mixed portfolio of crops in different countries had proved effective with overall harvest revenues growing by almost 50 per cent.

Partners in UFH include the Saudi Agricultural and Livestock Investment Company (SALIC), set up in 2011 with the aim of “ensuring abundant food supply for people in Saudi Arabia”.

Shares in Continental Farmers closed up 47.9 per cent, or 11.5p, at 35.5p.