Select Harvests Limited (ASX: SHV) has launched a capital raising campaign after fending off a takeover bid it says significantly undervalued the company.
Select Harvests, with a market cap of $388 million, is Australia's largest almond grower, collecting produce from 10,000 acres of almond farms in Australia, and a leader in the processing of nut products.
The almond grower knocked back a takeover bid by Abu Dhabi-based Mubadala Investment Company, a United Arab Emirates sovereign wealth fund, which sought to acquire 100% of Select Harvests for $5.85 per share.
The Select Harvests share price has surged this month, climbing from $3.91 on October 2 to close at $5.10 on Tuesday.
While news of the $431 million takeover proposal significantly bumped up the Select Harvests share price, the company said the bid significantly undervalued Select Harvests.
Select Harvests is now attempting to raise $65 million in capital, with $45 million to be generated by around 10.7 million in new shares to existing institutional investors and $20 million through a share purchase plan.
The nut company said it will use the funds to pay debts and improve "flexibility to continue to focus on its strategy of investing in productive long-term growth assets".
Select Harvests said the fundamentals of its business and industry "remain strong" as global consumption of plant protein and almonds continues to grow with: "US sales up 16% last season, absorbing increased production".
Another nut company, Webster Limited (ASX: WBA), has also seen its share price climb steadily in the past year.
Walnut producer Webster, with a market cap of $478 million, saw its shares close on Tuesday at $1.31, up from $1.15 this time last year.
But shareholders of the Rural Funds Group (ASX: RFF), which owns agricultural assets including nut orchards, have enjoyed better returns over the past year with the share price climbing from $1.60 to close on Tuesday at $2.11.
