Chris Corrigan to get $20m from Webster takeover deal

Chris Corrigan is chairman of Webster, which will be taken over by a Canadian pension fund. Picture: Hollie Adams

Chris Corrigan will walk away with over $20 million in his pocket after swapping a 12.5 per cent stake in nut grower Webster for 25 per cent of a new vehicle controlling cotton and other properties.

The move comes after the independent members of the Webster board agreed to a bid from Canadian public service sector fund PSP Investments which values the Australian company at $724 million in equity, with $130 million in debt.

The deal is subject to Foreign Investment Review Board clearance but this should not be a problem.

It also comes as water entitlements are big news in Australia and Corrigan will end up with the biggest share of permanent entitlements from the Webster portfolio because of his cotton assets.

Corrigan also has a stake in olive grower Boundary Bend whose owner Rob McGavin sold his water rights to acquire the Cobram Estate olive oil assets a decade ago.

McGavin is now leading the fight to control bidding rules for water rights, having already sold his entitlements before the drought, and now has a real need for water.

Chris Corrigan has a share in Boundary Bend and questions will now be asked about what the former Trick boss does with his spare cash from the Webster deal.

McGavin has attacked Adelaide-based Duxton Water, which owns water entitlements in its listed vehicle and extensive farm assets from grapes to dairy in its non-listed portfolio.

The issue here is at what price it transfers water from the listed to unlisted vehicles, but Duxton has produced several reports showing it has done the right thing by shareholders.

PSP Investments’ $2 a share scheme of arrangement bid compares with Webster’s price earlier this week of $1.27 a share. Webster shares soared as high as $1.96 after the deal was announced on Thursday.

Webster’s products range from bees to cotton to walnuts, but with 362 million shares on issue it tends to trade by appointment.

In the last five years the stock hasn’t gone close to $2 a share, which explains why the bid was recommended.

PSP, which has other investments in Australian agriculture, will create a new venture called Kooba which will include the bees business along with cotton at Darlington Point and Hay along with associated water rights.

PSP’s existing assets include pecan and macadamia nuts in Queensland, livestock and farm assets.

The assets in question account for roughly half Wesbter’s profits in a good year but in the middle of the drought it only produced around 25 per cent of earnings last year.

Kooba has a value of $276 million and Corrigan, along with another director David Fitzsimons will be offered a 50.1 per cent stake in the venture which, assuming they both pay for equal shares, will cost $69 million.

Webster chair Corrigan will collect $90 million for the sale of his shares to PSP, and Fitzsimons $77.4 million.

Corrigan now spends most of his year in Italy, being seen in Australia for only two months or so a year.