Maggie Beer in $15m bid to sell stake in food empire

CELEBRITY cook Maggie Beer has sold a 48 per cent stake in her food business for $15 million.

Maggie Beer. Photo: Bob Barker.

POPULAR South Australian foodie Maggie Beer says a deal to sell part of her business to a relatively unknown Australian sharemarket-listed entity backed by former Victorian political heavyweights will allow the company to do “new and exciting things”.

The deal to sell 48 per cent of her business for $15 million was announced by Victorian-based, ASX-listed Primary Opinion, which lists former Victorian Premier Jeff Kennett and ex-energy minister Nicholas Kotsiras among its shareholders.

The Barossa Valley-based private gourmet food business has until now been owned by entities of the well-known cook, author and TV presenter and her husband Colin.

“The way this is structured we only have to deal with the one partner and we keep the controlling interest,” Ms Beer says.

“It’s business as usual but the money can take us to places we haven’t had the money to go to before — to really focus on exports, to do the exciting things we have planned and other things that might come out of the woodwork.”

She said the money would fund a new warehouse, equipment and technologies — “things we need to stay ahead of the curve”.

Primary Opinion said its investment in Maggie Beer Products (MBP) was the first step in a wider investment strategy in the food and beverage sector.

As reported in The Advertiser’s Off the Record column earlier this month, Ms Beer, 71, abandoned plans to independently list her business on the ASX through leading broker Hugh Robertson, a director and shareholder in Primary Opinion.

“This deal is about providing capital to one of Australia’s most iconic food businesses to grow and boost exports,” Mr Robertson told The Advertiser.

“I started talking to Maggie about this two years ago and this is the culmination of those talks,” he said.

“It’s been a long process because we’ve been clear that we’re not going to change our ethos one bit,” Ms Beer said. “It’s all about quality and no shortcuts. We haven’t worked this hard to let someone undo that. I wouldn’t be doing it if I didn’t think it was possible.”

Maggie Beer. Photo: Bob Barker.

Primary Opinion chairman Tony Robinson will join the board of MBP.

“I will continue to be actively involved in the business and it was important for me and Colin to maintain control of the brand and business we have built over a number of years,” Ms Beer said.

Now a “national brand” in her own right, Ms Beer said there would be no dilution of the Barossa brand or any impact on the support to growers and focus on local produce.

Maggie Beer Products’ premium food range — covering pates, pastes, ice creams, jams, verjuice, soups and non-alcoholic beverages — is produced at its own manufacturing facilities and under contract elsewhere.

They are sold through major supermarkets, independents, gourmet food stores and online.

It is anticipated that the deal will result in about $10 million in gross proceeds for MBP to grow and expand its business.

Maggie Beer’s products are exported to China, Singapore and Hong Kong through distributors.

The ASX company will purchase the 48 per cent equity stake through a transfer of existing shares and the issue of new shares by MBP.

Primary will aim to raise $25 million from existing shareholders and other potential investors to fund the purchase and explore other opportunities in the food and beverage space and the deal will also need shareholder approval at a meeting planned for June.

Shares in Primary slumped 10 per cent on the news to 4.5 cents.

Established in 2004, Primary Opinion’s website says it offers business development products and services to law firms, but Mr Robertson said the company had “stepped out of technology” and was essentially just a “listed vehicle looking for investment opportunities” since he joined the group last year.

Prior to 2013, it was a social media company called Jumbuck Entertainment offering a chat platform.

“The history of Primary Opinion is irrelevant. Now we are dramatically changing to build value for shareholders,” he said.

The deal is expected to be completed by the end of June.

A recipe for future growth

Analysis — Simon Wilkinson

Maggie Beer is one of Australia’s most loved food heroes. Her natural warmth, whether on television or in person, make her a marketing dream.

When it comes to selling everything from ice-cream to jams to pate and, of course, verjuice, her name, alongside the recognition value of her beloved Barossa, has a huge impact. It carries a level of trust and a stamp of quality.

However, beyond these shores in the lucrative export markets of Asia and elsewhere, her name means next to nothing. Sales in these countries are a different, more difficult, challenge. The product, with help from strategic promotion and marketing, needs to stand on its own.

This is the main reason why Maggie, the businesswoman, along with husband Colin, have decided to sell close to half their company to a new investor.

They decided the business was being held back by a lack of funds.

Whether this is a win for both parties, as they hope, only time will tell. History shows that the ethos of a private business can often be in conflict with the interests of a publicly listed company seeking to maximise returns on an investment.