Paine Schwartz has backflipped and sliced its acquisition offer for Costa Group down to $3.20 per share.
👉 Background: Costa Group is the ASX-listed fruit and vegetable producer, which operates 7200 hectares of farmland in Australia. It produces everything from berries to mushrooms and even avocados.
👉 What happened: Last October, an American private equity firm named Paine Schwartz acquired around 14% of Costa at $2.60 a share. Then in May, Paine Schwartz made an acquisition offer of $3.50 a share, valuing Costa Group at $1.6 billion.
But now, Paine Schwartz has backflipped and sliced its offer down to $3.20 per share.
👉 What else: As part of the due diligence process, Paine Schwartz saw an expected $30 million hit from adverse weather conditions in Costa Group's profit outlook.
💡Some industries live and die by the weather forecast. And this can have a significant impact on the bottom line of a company... and valuation.
💡When Costa Group announced its interim results, it warned of a late start to the citrus season due to weather conditions. And it was a reminder for Paine Schwartz that many elements of this business are out of their control.
💡 And agriculture isn't the only industry impacted weather. The weather also impacts:
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