Duxton Farms Ltd (ASX:DBF), an operator of a portfolio of agricultural assets spanning approximately 177,000 hectares, has announced a strategic merger to acquire four Australian private companies. The merger includes Duxton Dried Fruits Pty Ltd, Duxton Dairies (Cobram) Pty Ltd (Duxton Walnuts), Duxton Bees Pty Ltd, and Duxton Orchards Pty Ltd. This move is expected to significantly increase the scale and diversification of Duxton Farms’ portfolio.
To facilitate the merger, Duxton Farms is undertaking a $4.0 million conditional underwritten placement of new fully paid ordinary shares at an offer price of $1.25 per share. The placement is conditional on the implementation of the merger. Following its recent asset divestment of the Kentucky property for $38 million, Duxton Farms has also announced a one-off 85% franked special dividend of $0.24 per share.
The merger is projected to add approximately $149 million in pro forma gross assets to Duxton Farms, based on figures from 31 December 2024. Post-merger, the company will boast over $298.0 million in gross assets, 180,000 hectares of land, and 32,000 megalitres of water entitlements. Major shareholders have committed to participate in the dividend reinvestment plan, representing 52.1% of the total dividend.
In addition to the merger and placement, Duxton Farms is proposing a simplification of its existing investment management agreement with Duxton Capital (Australia) Pty Ltd. This includes altering the management fee to 1.25% of the net asset value of Duxton Farms and its subsidiaries, removing the current performance fee, and refining the services provided. The company intends to launch a share purchase plan following the merger’s completion.
