Dairy industry

Shares in dairy maker rise to eight-year high after US$250m deal with Chinese conglomerate Citic

Citic Agricultural Industry Fund Management will become Ausnutria Dairy Corporation’s largest shareholder

PUBLISHED : Friday, 06 April, 2018, 2:26pm
UPDATED : Friday, 06 April, 2018, 2:26pm

Shares in Ausnutria Dairy Corporation rose to their highest level in eight years on Friday, after the company announced that a subsidiary of Chinese state-owned multinational conglomerate Citic will become its single largest shareholder following a transfer of shares.

The Changsha-headquartered goat milk producer said Citic Agricultural Industry Fund Management will spend a total of HK$1.96 billion (US$250 million) as part of the deal.

Ausnutria will issue 249 million new shares to Citic Agricultural, at a price of HK$5.18 per share, for a total cost of about HK$1.29 billion. The price is a 20.67 per cent discount on Wednesday’s closing price of HK$6.53.

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In addition, Taizhou Jieda Pharmaceutical said it will transfer 10.35 per cent of its Ausnutria shares, or 130 million shares, to Citic Agricultural for HK$673 million.

Upon completion of the deal, Citic Agricultural will hold 25.18 per cent of joint venture’s issued share capital, and Center Laboratories’ shareholding will decrease from 40.28 per cent to 24.98 per cent, which means it will remain a major shareholder of Ausnutria.

The number of shares held by the chairman of the company’s main operating team, Yan Weibin, and its chief executive, Bart van der Meer, remains unchanged, and the pair’s interests in the company will remain at 7.11 per cent and 10.80 per cent, respectively, after the deal.

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On Friday Ausnutria climbed by as much as 2.45 per cent to HK$6.93, its highest intra-day level since November 2009.

The Citic Group, founded in 1979, has developed into a state-owned multinational conglomerate. Its businesses cover finance, resources, energy, manufacturing, project contracting and real estate.

The Citic Agricultural Industry Fund Management was initiated by Citic Modern Agricultural Investment, a wholly owned subsidiary of the group. The company has a background in the ownership of large state-owned enterprises, and focuses on investment in agricultural biotechnology and branded consumer products.