The Vitalharvest Freehold Trust (ASX: VTH) share price has been one of the best performers on the Australian share market on Tuesday.
Which really is saying something given the strong gains that are being made across the board today.
In afternoon trade the agriculture-focused real estate investment trust's shares are up a massive 23% to 96.5 cents.
Why is the Vitalharvest share price rocketing higher?
Investors have been scrambling to buy the company's shares today after it confirmed that Macquarie Infrastructure and Real Assets (MIRA) has made a takeover offer.
According to the release, the trust's responsible entity has received a conditional proposal from an agricultural fund managed by MIRA to acquire all of the issued units in the trust for $1.00 per unit by way of a trust scheme. This represents a 27.4% premium to its last close price.
In addition to this, if the trust scheme fails to gain approval, MIRA has proposed to purchase the assets of the trust for a cash consideration of $300 million.
The proposal is conditional on (among other things) the responsible entity agreeing with MIRA a scheme implementation agreement. This agreement would require the responsible entity to recommend both components of the MIRA proposal – the trust scheme and the asset purchase – to unitholders.
What now?
The trust's responsible entity will carefully consider the proposal to determine whether it is in the best interests of unitholders and whether it is prepared to recommend it.
This will include seeking input from Primewest Agrichain Management in its capacity as manager of the trust.
At this point, it has advised that unitholders do not need to take any action in relation to the proposal. They have also been warned that there is no certainty that the proposal will result in any transaction.
In the meantime, the responsible entity will make a further announcement in connection with the proposal in due course and will keep unitholders informed in accordance with its continuous disclosure obligations.
One of its tenants, Costa Group Holdings Ltd (ASX: CGC), spoke about the proposal on Monday.
It said: "Costa supports any outcome that provides ongoing certainty in relation to the farms Costa leases from Vitalharvest and would be comfortable in the event that MIRA's bid was successful."
