Comvita subject of takeover interest

TAURANGA: Comvita, the NZXlisted manuka honey company, says it may be the subject of a takeover, with an unidentified third party undertaking due diligence to assess the business.

The Paengaroabased company emphasised that the possible acquisition remained for now ‘‘an incomplete transaction’’ and there was no certainty any offer would be forthcoming.

Comvita’s board disclosed the potential takeover along with a downgrade to its earnings forecast for this year. It said it felt obliged to disclose that a third party had been conducting due diligence on the company for several months ‘‘to assess the potential acquisition of all or substantially all the shares in Comvita, whether by way of takeover scheme of arrangement, amalgamation or other business combination’’.

The due diligence was ‘‘moving towards a conclusion’’ and Comvita expected to provide a further update by midMay.

Comvita’s flagship manuka honey business can be volatile as weather conditions impact honey production. The company warned its aftertax operating earnings for the year ending June 30 were expected to be between $8 million$11 million, down from an earlier forecast for earnings of more than $17.1 million as adverse weather in the second half of the 2018 honey season hurt its honey harvest.

‘‘We have now completed 80% of the extraction for the season and tested 50% of our honey and the yields are well below expectations; around half of what we originally budgeted,’’ chief executive Scott Coulter said.

‘‘This poor harvest has a direct impact on our apiary business profitability for the current financial year.’’ — BusinessDesk