LIC will buy 4 million shares in NMR at 65 pence apiece, or £2.6 million. NMR, whose shares trades on the NEX Exchange Growth Market, faces a total cost of £14.8m to exit the Milk Pension Fund, according to an NMR statement. Exiting its liabilities to the fund would allow NMR to attract new investment and focus on its core businesses, it said.
It will meet that through a lump sum payment of £10.1m to the trustees of the fund, a payment of £4.68m pounds to UK biotech company Genus in cash and new NMR shares to assume its liabilities in the fund, and the sale to Genus of its genetic products subsidiary Inimex. The transaction will be funded via the issue of £7.33m of shares at 65 pence each, existing resources and a new bank facility, it said.
LIC chief executive Wayne McNee said the increased investment in National Milk "aligns with the co-op’s strategy to focus on key international markets that will add value for shareholders". The UK "is a key market for LIC and NMR is a key player in that market."
LIC originally invested in NMR in 2003. As part of the new investment the two companies have agreed to "work together to deliver mutual benefits, including greater integration of LIC and LIC Automation into the UK dairy industry," McNee said.
LIC shares, which can only be traded by cooperative members, last changed hands at $2.45 and have dropped 2% in the past 12 months while the S&P/NZX 50 Index rose 11%. NMR last traded at 71.5 pence and has fallen 8.9% in the past year.
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