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Landmark price 'fair': AWB
15 Sep 2003
AWB Ltd's claim that it paid a fair price for Wesfarmers' rural business Landmark has come under scrutiny as it fields criticism over its assertion that the $825 million price-tag included $170 million in cash. The purchase price was deemed expensive at a net of $718 million, amounting to a notional $825 million enterprise value with $107 million of assumed debt. AWB MD Andrew Lindberg later argued that this included about $170 million in cash which should be subtracted from the enterprise value.
But one analyst said it was "nonsense" to imply the $170 million should be subtracted from the notional enterprise value when it was balanced by farmer deposits totalling $282 million.
An AWB spokesman later agreed that the $170 million cash referred to by Mr Lindberg was balanced by farmers' interest-bearing accounts. We view it as cash that can be used in other parts of the group, he said.
Australian Financial Review, 15/9/03.
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