First North listed Alpcot Agro (STO: ALPA), which invests in farmland and associated agricultural operations in Russia and Ukraine should see plenty of action tomorrow morning. The company announced after trading close today that it is offering to acquire Landkom International PLC, which has a 74,000 ha leased landbank in Ukraine. The offering is for an all-share transactions valuing Landkom at 139.3 million SEK based on the average closing price of Alpcot Agro in the last 20 trading days (7.10 SEK). Alpcot Agro closed at 6.40 SEK today.
The Board of Landkom, an Isle of Man incorporated company, is recommending its shareholders to accept the offer. Following completion, present Alpcot Agro shareholders would own 83% of the combined company. The companies’ landbank in Ukraine is in near proximity to one another, allowing for synergy benefits (Alpcot Agro has around 18,800 ha under control in Ukraine).
The acquisition is subject to a n approval from Anti-Monopoly Commission of Ukraine. Landkom has been under some working capital stress as of late and had to retract from its growth ambitions. Landkom has a short term need to refinance 14.1 million USD in trade payables due to its main trade supplier Amako. Other companies in the field (ie Trigon Agri) have said in their quarterly reports, that they are waiting for opportunities of distressed acquisitions to arise. In connection with the planned acquisitions, Alpcot Agro is undertaking a directed share issue through book building process
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