Lewis punching above his weight at Australian Agricultural Company
Speculation is mounting that some sort of corporate activity could be about to unfold involving the Australian Agricultural Company, with suggestions in the market that its major shareholder could be progressing with a privatisation.
Some have questioned whether investment bank Macquarie Capital is now on the scene, although sources close to the bank said yesterday it was not involved and that UBS was considered AACo’s house adviser.
The country’s largest cattle group is listed as a $700 million company on the Australian Securities Exchange and has experienced a dramatic fall in its share price over the past year from close to $1.90 to $1.165, which may make it a good time for a buyout.
AACo counts the company of British billionaire Joe Lewis as its largest shareholder, with a 42.48 per cent stake in the business, according to Bloomberg data, and the expectation has always been that he would move to privatise the company.
Now people are starting to bet that could be happening sooner rather than later.
One wonders whether Macquarie would fund a bid by Mr Lewis, given that it has a reputation for such moves.
Early last year, AACo embarked on an overhaul of its executive team on the back of greater control exerted by Mr Lewis.
This was part of a move to radically modernise the 200-year-old company when beef prices were surging.
It has changed rapidly in recent years, evolving from a business that produces live cattle to a premium and branded beef company.
Mr Lewis owns English Premier League soccer team Tottenham Hotspur via Tavistock and has raised his stake in AACo over time. His executives are widely viewed as being in a position to offer much to the investment team.
In the past, AACo has called on the services of UBS, and interestingly, it appointed former UBS managing director Dane Fitzgibbon as its head of strategy last year.
But it is worth noting that former Macquarie Group executive Anthony Abraham is on the AACo board.
