Driscoll's builds stake in JV partner Costa Group
A stealth shareholder in leading Australian fruit and vegetable company Costa Group has been revealed to be its very own joint venture partner Driscoll's.
The Australian Financial Review reported that Driscoll's has built a stake in Costa – which had more than A$2bn (US$1.3bn) wiped off its market value in the past 18 months – to just below the 5 percent "substantial shareholder" threshold. Above that level, its holding would have to be disclosed.
Costa reportedly confirmed Driscoll's investment on Tuesday afternoon in a statement to the ASX. "Driscoll's has acquired shares in Costa and the holding is less than five per cent," a Costa spokesman was quoted as saying.
Driscoll's is a private company based in Watsonville, California and is the largest fresh berry company in the world.
"Costa has a relationship with Driscoll's which dates back a number of years," Costa chief executive Harry Debney was quoted as saying by the Sydney Morning Herald.
"It's one based on mutual respect, which is reflected in the fact that we have a joint venture marketing operation in Australia, and a joint venture farming and marketing operation in China which was set up in 2016."
Costa Group had a tough calendar 2019, announcing a series of profit warnings, farming challenges including extremely dry conditions and low prices for mushrooms, one of its key crops.
While it is not known when the stake was first established, the Australian Financial Review reports that its existence will interest long-suffering shareholders nonetheless,