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An aerial view of one of the Crafar farms - Source: ONE News -
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Prominent businessman Sir Michael Fay denies his Crafar farms bid is a play to nationalist sentiment.
Sir Michael and iwi investors announced today they are leading a multi-million dollar bid for all of the Crafar group of farms.
The Crafar family lost the farms in late 2009 when Westpac called in receivers and the properties have since been the subject of a high-profile debate over foreign ownership following a failed bid by Chinese-based Natural Dairy.
Collectively the farms are valued at more than $200 million and another Chinese buyer - Shanghai Pengxin Group - has a bid on the table that is reportedly over that mark.
Sir Michael said he did not have a problem with foreign investment in other areas, but thought productive land should be kept in New Zealand hands.
"It's not about saying 'you can't sell this land here or there'," Sir Michael told TV ONE's Close Up.
"You've got to break it out. Productive land is one thing to think about clearly.
"I think it's a good question as to whether or not long term, in a competitive advantage as part of our strategy, we look to maintain ownership."
Sir Michael did not say exactly what his stake in the land would be, but that it was "much less" than the 40% iwi across the board would get.
The group, which includes strong support from local farmers, is offering $171.5 million for the 13 dairy farms and three drystock properties currently being managed by receivers Korda Mentha
The bid works out to an average of more than $28,500 per hectare for the North Island properties.
But Sir Michael says he is not chasing a bargain.
"Remember we've got 16 properties. They vary in terms of locality and in price from $12,00 up to $38,000 ... So it's an average price and it's a very, very good price," he said.
"It's got to make investment sense, for iwi, for us, for farmers."
Sir Michael said their bid does not have "the complication" of needing Overseas Investment Office approval.
"We'd like to be on the farms before Christmas to get them up to full production for the new season starting in mid 2012," he said when announcing the bid today.
Pengxin's application is still undergoing OIO processing after being lodged in April.
The Hong Kong based company said at that time that it intended
to employ locals and invest in upgrading the farms.
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Collectively the farms are valued at over $200 million and another
Chinese buyer - Shanghai Pengxin Group - has a bid on the table
that is reportedly over that mark.
'Accurate' bid
Sir Michael said the average per hectare price was an accurate reflection of current land, asset and herd values and due diligence would be needed to confirm the value of the $171.5m farmer group offer.
Steve Bignell, of Stretton's Chartered Accountants in Taupo, is the lead negotiator for the group of farmers. He said the offer puts the bid in the leading bracket for dairy farm sales in the area and across New Zealand.
"There are variations in the per hectare price we're offering for each farm in the Crafar package - for example there are properties ranging up to $38,000 per hectare - but as an average price it's getting up there when you look at current prices in the market," Bignell said.
A month ago, Fay led a $105 million bid for nine properties which was turned down by Korda Mentha.
Bignell said the group has pitched it right this time.
Around 40% of the offer is being funded by iwi investors, including the Tiroa E and Te Hape B Trusts from Te Kuiti.
Chairman Hardie Peni said he is keen to capitalise on the opportunity.
"I want two of the farms in the Crafar portfolio to sit alongside our farms," he said today.
"The iwi of Ngati Rereahu wants to have their traditional tribal land returned. This opportunity means that land lost can be recovered by its rightful owners".
Sir Michael also reiterated earlier comments about keeping farm land in New Zealand hands and says he knows the current Chinese contract needs to be rejected by the OIO for his to go ahead.
"I firmly believe we must keep our competitive advantage for exports and that advantage is in what we do with our land. To me that means we must retain New Zealand ownership of our productive land," he said.
He is asking the receivers to make a quick decision on his "purely New Zealand offer" to allow local farmers to get onto the land as soon as possible.
