Duxton Farms’ $4.55M Placement Hinges on Complex Merger Approvals
Duxton Farms has increased its placement to $4.55 million, issuing over 3.6 million new shares to fund the acquisition of four Australian agriculture companies. This move aims to fast-track the company’s diversification and growth strategy in the agricultural investment sector.
- Placement upsized to $4.55 million due to strong investor demand
- Approximately 3.64 million new shares issued at $1.25 each
- Placement supports acquisition of four Australian agriculture companies
- Share Purchase Plan to be offered post-merger to eligible shareholders
- Revised pro forma financials reflect impact of upsized placement
Placement Upsized Amid Strong Demand
Duxton Farms Ltd has announced an upsizing of its conditional placement to $4.55 million, a significant increase from the initially announced $4 million. This adjustment reflects heightened demand from both existing shareholders and new sophisticated investors. The company plans to issue approximately 3.64 million new fully paid ordinary shares at $1.25 each, with the placement contingent on the completion of a major merger involving four Australian agricultural companies.
Strategic Merger to Accelerate Growth
The funds raised through this placement, combined with existing cash reserves and financing facilities, will be deployed to execute Duxton Farms’ strategic objectives. Central to this is the acquisition of the four agriculture companies, which the board believes will accelerate the company’s diversification within the Australian agricultural sector. Independent Director Mark Harvey highlighted that this merger aims to achieve in three to five years what might otherwise have taken five to ten, marking a decisive shift in the company’s growth trajectory.
Shareholder Participation and Financial Impact
Following the merger, Duxton Farms intends to offer a Share Purchase Plan (SPP) to eligible shareholders, allowing them to acquire additional shares up to a $30,000 subscription limit. This initiative is designed to offset dilution effects from the merger for most shareholders outside the top 40, who collectively hold around 90% of the company’s shares. The announcement also includes revised pro forma consolidated balance sheets and capital structures, reflecting the increased placement proceeds and the anticipated merger impact as of 31 December 2024.
Governance and Next Steps
The placement is divided into components, including offers to institutional investors and entities associated with major shareholders Richard Magides and Ed Peter, both of whom are expected to participate subject to shareholder and regulatory approvals. The company has outlined key dates for the placement settlement, special dividend payments, and merger-related shareholder meetings, with the entire process expected to conclude by the end of 2025. Duxton Farms will host an investor webinar on 3 July 2025 to discuss the merger and placement details, inviting questions from shareholders and analysts.
Outlook and Market Positioning
With a track record of divesting $108 million in dryland cropping properties and returning 34 cents per share in dividends over 18 months, Duxton Farms is positioning itself as a scalable agricultural investment platform focused on stable earnings and capital growth. The board’s confidence in the merger as the most compelling long-term value proposition underscores a strategic pivot that could reshape the company’s market presence and investment profile.
Bottom Line?
Duxton Farms’ upsized placement and merger signal a bold step toward accelerated growth, but execution and approvals remain critical hurdles ahead.
Questions in the middle?
- Will shareholder and regulatory approvals, including FIRB, be secured smoothly for the merger and placement?
- How will the merger impact Duxton Farms’ earnings stability and capital growth over the next 3-5 years?
- What are the potential risks if the Share Purchase Plan uptake falls short of offsetting dilution for smaller shareholders?
