AACo in acquisition row with shareholder

Beef producer Australian Agricultural Company Ltd (AACo) has accused a major shareholder of pursuing its own agenda by opposing AACo's proposed $105 million acquisition of two neighbouring cattle stations in the Northern Territory.

Dubai-based food processing group IFFCO Poultry Co Ltd, which acquired a 14.9 per cent stake in AACo in March this year and has agreed to acquire another five per cent, said last week the acquisition of the Tipperary and Litchfield stations may not be in the best interests of AACo.

IFFCO said it would oppose the acquisitions when AACo seeks approval at a shareholders' meeting on April 27.

AACo independent director Brett Heading said on Wednesday that when IFFCO acquired its stake in AACo, the Tipperary and Litchfield transaction had already been announced.

He said IFFCO was opposing the deal for "inappropriate" reasons.

"They (IFFCO) have been out here a very short amount of time. They are a minority shareholder. It's the tail wagging the dog," Mr Heading told AAP.

"They're trying to exercise undue influence from a minority position."

Mr Heading said it appeared IFFCO was developing an association with some other minority shareholders.

"What's IFFCO's story here? Are they looking at trying to get to a position of controlling AACo without making a bid, owning a miserable 20 per cent of the company?" he said.

AACo announced in February its intention to acquire the two stations from interests controlled by barrister and pastoralist Allan Myers for $105 million.

The sale of 52.8 million AACo shares, representing a 19.9 per cent interest in AACo, by rural services and automotive components supplier Futuris Corporation Ltd to Mr Myers, is conditional upon Mr Myers completing the sale of the Tipperary and Litchfield stations to AACo.

IFFCO had said material circulated by AACo, including the independent expert's report from BDO Kendalls, did not contain sufficient information to enable IFFCO to decide whether the proposed acquisition of Tipperary and Litchfield was in AACo's best interests.

IFFCO also said it did not believe the purchase fitted in with AACo's corporate strategy.

Mr Heading said taking potshots at an independent expert may be the way that IFFCO behaves in Dubai.

"It's a bit like criticising the umpire and decking the umpire at the side of the footy match - it's just not the way we do things here in Australia," he said.

Mr Heading said IFFCO had complained that insufficient financial information had been provided on the Tipperary and Litchfield transaction.

"That's a really ignorant comment on their part," he said.

Tipperary and Litchfield would be run differently to the way of the previous owners and what had gone on in the past on the two stations was "absolutely irrelevant".

"What people can mark AACo on is what profit comes out of this place over the next two or three years," Mr Heading said.

Mr Heading suggested IFFCO representatives stop by at Tipperary and Litchfield at some time to look around.

"They might get a better vision for what the company is preparing rather than firing potshots from first class on the Emirates plane," he said.

AACo on Wednesday released a letter from BDO Kendalls responding to the IFFCO criticism.

BDO Kendalls said Tipperary and Litchfield would become part of a much larger cattle business and their function would be changed to focus on the finishing of cattle bred elsewhere in AACo's holdings.

BDO Kendalls said it was important to understand the proposed transaction was an asset acquisition, not a business acquisition.

"Historical financial information relating to the business in which the assets are currently employed is not relevant in the circumstances as AACo is not acquiring the business and the business will not continue in its current form," BDO Kendalls said.

AACo shares were four cents lower at $1.54 on Wednesday.