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Simon Parker
Elders has announced that it is selling its rural division, which includes its real estate business.
In a statement to the Australian Securities Exchange (ASX) yesterday, the company said the decision to sell Elders Rural Services was “part of an accelerated strategy to return value to stakeholders”.
“This sale process will occur concurrently with the sale process of Futuris Automotive previously announced to the market."
“The company is in discussions with its banking syndicate about an appropriate refinancing. The market will be kept informed.”
According to the Elders website, the company operates 230 rural branches and "339 points of presence" providing services and products related to farm supplies, livestock, wool, grain, real estate and various financial services.
The real estate division is broken up into company-owned and franchise offices.
A company spokesperson told Real Estate Business that, “at this early stage, there is not much that can be said other than that the sale process will take some months and we will provide updates when information comes to hand”.
“Real estate is a core product of Elders’ rural services offering and it is extremely important part of the business but it is too early to speculate on what form the sale will take and whether or not any parts of the business will be sold off separately.
“For all our products and staff it is business as usual – the sale process does not fundamentally change what we need to focus on.”
Rival RuralCo, which owns a 12 per cent stake in Elders, recently proposed to merge the two rural businesses. While the rival said it was "disappointed" with the decision to sell the rural business, it said the move could create opportunities for RuralCo.
Belinda Moore, agribusiness analyst for RBS Morgans, told the Sydney Morning Herald that Elders may be looking to “flush out any other offers out there” in a bid to increase the sale price.
There would be little left of the company once the rural business was sold, according to the Sydney Morning Herald, with Elders chief executive Malcolm Jackson telling the newspaper that, "Inevitably, I'm selling myself out of a job".
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