Advisers wooed in Elders takeover

Hamilton Securities has made a presentation to financial advisers, appealing for support in taking over a number of Elders Forestry Sandalwood schemes at a vote on Thursday.

The vote is currently “too close to call”, according to Hamilton director Giles Craig.

An alternative proposal from Elders involves overseas buyer Santanol taking over the 15 schemes for a total of $70 million, which Craig says vastly underrepresents the value of the assets.

The Santanol proposal will require approval from at least 12 of the 15 schemes, with 15 separate meetings to be held on Thursday 14 March. Each scheme requires 75 per cent grower approval at a vote for the Santanol proposal to be accepted.

“Financial planners and growers we have spoken to are very unhappy with the Santanol proposal and are keen to see an alternative,” Hamilton stated.

According to Hamilton, the average price being offered by Santanol to growers is $39,576 per hectare of sandalwood.

Hamilton said TFS values the standing sandalwood at $133,693 per hectare, the TFS share of managed investment scheme sandalwood at $89,625 per hectare, and newly-planted sandalwood at $81,314 per hectare, while the wholesale price for new schemes is $66,000 per hectare.

Hamilton said under its counter proposal for growers, they would exchange their sandalwood interests for shares in Hamilton.

“For each dollar that Santanol plans to pay, we intend to offer one Hamilton share. As a result, growers will own $68 million to 70 million, or about 95 per cent of Hamilton shares,” Hamilton stated.

If growers accept the Santanol offer, Hamilton said it will not make any offer to growers, but if growers reject the Santanol offer, Hamilton will then put its offer to them.

Add comment

Security code

Feature Video

Latest Blogs


Opinion: Standing with risk advisers

Scott Hodder: It has now been one year since Risk Adviser first started publishing. Launched in February 2015, the title was created in light of a re-emerging risk community...More >>

The drop in oil price and its effect on the economy

George Lucas, Instreet Investment: Those with long memories will vividly recall how the Arab-Israeli war of 1973 and the Iranian revolution in 1979 sent the oil price sky-rocketing. OPEC...More >>

Easing the PI headache

Alice Uribe: While the industry has moved towards a fresh vision of professionalism and an exciting evolution in business models, it's still, unfortunately, being hamstrung by a...More >>

Latest Comments

  • FOS denies biased conduct claims

    Hi Steve, I think the difference here is that it involved a big four bank (ANZ). I think the brokers and advisers sometimes get a raw deal because they ...
    09 Feb 20:23  
  • FOS denies biased conduct claims

    How can FOS deny biased conduct. Have a look at this: My wife and I have an unresolved dispute with the Commonwealth Bank. We asked FOS for help.
    09 Feb 18:11  
  • LIF a 'threat' to the existence of risk practices

    The key disclosures and other usless clutter would be in a seperate reference document, stuffed into the FSG or available somewhere on our website.
    09 Feb 15:43