Duxton Farms to merge four funds together

The ASX-listed agricultural entity has proposed the acquisition of four private funds, creating an entity operating 180,000ha and holding 32,000ML of water entitlements.

Duxton Farms is looking to bring four of its private funds into its main body, as it looks to accelerate its exposure to the Australian agricultural sector.

The ASX-listed company on Thursday proposed the acquisition of Duxton Walnuts; Duxton Dried Fruits Pty Ltd, Duxton Bees Pty Ltd, and Duxton Orchards Pty Ltd.

The companies are currently listed in the portfolio of the Duxton Diversified Agriculture Fund.

“The walnut, dried fruit, apiary and apples businesses being brought into Duxton Farms are expected to significantly de-risk the company’s geographic and commodity exposure while expanding and diversifying its earnings profile,” Duxton Farms independent director Mark Harvey said.

“The board will continue to consider opportunities to cycle out of lower yielding assets into high-growth opportunities in order to further de-risk the portfolio and create sustainable long-term value for all our stakeholders, be that through further dividends or capital growth.”

Duxton Apples farm at Loxton. Picture: Supplied (CBRE)

The merger is expected to double the groups total gross assets to over $298m, creating an entity operating over 180,000ha and holding 32,000 megalitres of water entitlements.

The company also announced a $4m underwritten placement of new fully paid ordinary shares at an offer of $1.25 per share, conditional on the requisite approvals.

Its share price is currently sitting at $1.35, and is down 10 per cent in the past 12 months.

In addition, a one-off 85 per cent franked special dividend of $0.24 per share, totalling approximately $10m, will be paid following the $38m divestment of its Kentucky farms property to Alkira Farms Inc. earlier this year.

The merger is scheduled to be completed in September this year, upon approval from shareholders, the Foreign Investment Review Board, and the court in accordance with the Corporations Act.