Fraser and Neave is investing in a New Zealand manuka honey business by chipping in some NZ$20.1 million ($15 mil) in a round of equity raising.
New Zealand-listed Comvita plans to raise additional equity of some NZ$30 million by issuing new shares to existing shareholders at 65 NZ cents per share.
Upon completion of the entitlement offer, F&N is expected to hold a 19.99% shareholding in Comvita.
If this level is not achieved through the entitlement offer, F&N will take up additional new shares through a top-up placement at 80 NZ cents per share. Comvita shares now trade at 68 NZ cents, up 33.3% year to date.
According to local reports, rival Kiwi honey company Florenz had offered to acquire Comvita but was rejected by the latter's shareholders despite support from Comvita's board.
F&N, which manufacters and sell drinks ranging from 100Plus to Magnolia to FruitTree, says the proposed investment reflects its continued focus on strengthening its portfolio in higher-growth, premium consumer segments.
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F&N describes Comvita, founded in 1974, as a well-established wellness brand with strong heritage, category leadership and a growing international presence.
The investment builds on F&N’s existing nutrition and functional beverage portfolio, and deepen its participation in natural wellness segments and broaden its exposure to categories with attractive long-term growth potential.
"For F&N, this is an opportunity to broaden our participation in health and wellness segments in a manner that builds on capabilities we already possess," says F&N's group CEO Rahul Colaco.
"We also see scope to contribute our regional market understanding, route-to-market strengths and operating experience to support Comvita’s growth ambitions over time," he adds.
F&N shares closed at $1.45 on April 14, down 0.68% for the day and down 3.33% year to date.
