Fund eyes caged-egg upgrade

The sale of a majority stake in Dunedin-based Mainland Poultry to an Australian investment fund has been confirmed by the Overseas Investment Office (OIO) for a price ‘‘exceeding $100 million’’.

Australian media reports have put the value of the deal with Navis Capital Partners at $350m, which comes as Mainland embarks on major investment to comply with pending animal welfare rules on the size of cages.

Two of the high-profile sellers of Mainland include Dunedin investors Michael Guthrie and Murray Valentine, who set up the company in 1997.

Guthrie owned about threequarters of the company, and is listed in the National Business Review as having a $200m fortune.

The new owner intends to invest in Mainland Poultry to help make the transition from conventional cages earlier than required by law and to grow the business. It also farms some free-range hens.

The cost of changing to new and bigger cages is estimated to be as high as $50m.

Mainland Poultry is this country’s biggest egg-producing business, sold under the Zeagold and associated brands. It also rears layer hens and makes animal feed through subsidiary companies to supply to other poultry companies.

Navis Capital has set up a new company called Dragline to own the Mainland shares.

Guthrie, Valentine and other New Zealand Mainland shareholders Roger Macassey, Ian and Aileen Winmill, Barbara Gibson, and James and Christine Sutherland will keep a 25 per cent stake.

The OIO said the benefits of the deal to New Zealand included New Zealand oversight and participation through keeping the 25 per cent shareholding, a new full-timeequivalent senior strategy role, capital expenditure to develop a recently acquired farm in the Waitaki District, and new jobs.

‘‘Navis has undertaken previous investments that have been or are of benefit to New Zealand in the education resources and retail menswear sectors,’’ the OIO said.