New Zealand’s PSA outbreak stalls Satara-Eastpack merger
The proposed merger of New Zealand kiwi growers and packers Satara and Eastpack is being reviewed due to the PSA kiwi vine disease outbreak, while fellow kiwi grower Seeka maintains its profit forecasts for the year.
According to a statement from Satara to the country’s stock exchange NZX, the two companies put the move on hold in order to evaluate how the disease has impacted the value of the deal.
While both Satara and Eastpack continue to recognize the operational and strategic reasons for the merger, the uncertainty around the potential impact of PSA has meant that the original price and deal structure are now under review, the statement said.
A planned shareholders meeting in December has been cancelled, and a revised offer should be released in early 2011, the statement added.
However kiwi grower Seeka said in its own statement to the NZX that it maintains its profit forecasts for the year, mainly because the bulk of its business takes place in the first half of the year.
“Shareholders are reminded that Seeka operates within a seasonal industry with a significant proportion of profits earned in the first six months of the year,” the statement said.
Seeka made the announcement while detailing its financial results from the firs half of 2010. Seeka's total revenue for the six months increased to NZD $110.4 million, up 15.6% on the previous year.