Elders Limited has denied media reports today that it is considering a formal proposal from Ruralco regarding a potential merger between the two rural services companies.
Ruralco chairman Richard England was quoted by the Australian Financial Review as saying Ruralco has approached Elders about a potential merger, but the offer was turned down on the grounds it lacked sufficient detail.
The AFR said Mr England had stated that it was difficult for Ruralco to submit a more detailed offer due to uncertainty surrounding Elders' balance sheet.
In a statement issued to the Australian Stock Exchange this morning, Elders managing director Malcolm Jackman said the company had not received a formal merger proposal.
“In light of the press in the Australian Financial Review today, Elders Limited (Elders) confirms that it has not received a formal proposal from Ruralco Holdings Limited (Ruralco) or any other party in relation to an offer for the company, a merger or a transaction related to Elders Rural Services,” Mr Jackman said.
“Elders confirms that it received a short confidential letter from Ruralco regarding the potential for a transaction opportunity between Elders and Ruralco.
“The letter was conceptual in nature and lacked sufficient detail to enable it to be evaluated.
“Elders advised Ruralco that if it provided a sufficiently detailed proposal the Board would evaluate it and Elders has heard nothing from Ruralco since that time.
“The Elders Board would obviously consider and evaluate any sufficiently detailed proposal, should one be made.
“In Elders' view, the approach from Ruralco underscores the progress that Elders is making in its strategy to become a “pure play” rural services businesses.
“Elders remains fully committed to the execution of that strategy and continues to believe that it has the capacity to create significant value for shareholders over time.”
After buying 10pc of Elders in June, RuralCo increased its stake in the rural services company to 12.04pc in early August.
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