A new bid has been tabled for former Reporoa dairy farmer Alan Crafar’s 16 farms, but it falls well short of an existing offer from Chinese interests.
The $171.5 million offer has been made by a group headed by Sir Michael Fay, and which includes local iwi interests, and local farmers, and equates to $28,500 per hectare for the 8000 hectares.
Sir Michael told Radio New Zealand the group had put a lot of effort into assessing the market value of the farms, but that the reality is that his group’s offer is a backup offer – should Shanghai Pengxin not get Overseas Investment Office approval.
The Crafar receivers Korda Mentha have already accepted Shanghai Pengxin’s $200 million offer for the farms, but their application has been with the OIO since mid-April.
Sir Michael said that while in money terms their offer may be far lower, they offered different value in terms of the land being farmed by local interests.
And that has impressed Federated Farmers which says Sir Michael is offering the receiver a great option, should the Shanghai Pengxin Group, for some reason, fall over.
Robin Barkla, Federated Farmers dairy vice chairperson says there are probably no tangible benefits if the Chinese own them.
“There are lots of farm ownership in foreign hands now and they have to live by our rules, and they employ local people and the jobs and everything stays local.
"But I guess at the end of the day any profits do go offshore with foreign ownerships. Whereas with Kiwi ownerships it stays in our economy and goes round and round which is obviously a good thing.”
However Mr Barkla says its vital the OIO process follows the proper course, and that potential investors from abroad need confidence that we have a solid process in place, and don’t favour local bids.
He says if the Chinese offer ticks all the boxes there should be no reason it shouldn’t get it.
Mr Barkla says Federated Farmers has faith in the syndicate, despite Sir Michael’s controversial business history in New Zealand.
“We want the right people involved, but he is head of a syndicate, I believe there are some iwi involved and some other farming groups, so it’s certainly not Sir Michael buying the whole lot. And certainly I wouldn’t want to say on air anything that would discredit his character.”
In 2007, Sir Michael Fay and his business partner David Richwhite paid $20 million to the Securities Commission to settle an insider trading case.
While Allan Crafar didn’t have a comment on the latest bid he says the media behaves as if the Crafar’s don’t exist.
He says his focus is on his son, Glen’s, ongoing court case in the Waikato District Court for breaching the Resource Management Act.
He says Glen is only in court because of his surname.
