Costa Group reviewing reduced private equity bid

The news: Costa Group, Australia’s top fruit and vegetable supplier, says its board is considering a reduced takeover offer by US private equity group Paine Schwartz Partners.

The numbers: The company said PSP has cut its revised offer to $3.20 a share, down from the $3.50 per share initially offered in May. Costa Group shares closed at $2.94 on Friday.

The context: The lower bid follows a drop in Costa’s half-year profit last month. The country’s biggest horticultural group also flagged that earnings would fall in the second half of the year and forecast a $30 million hit from weather-related problems. On Monday, Costa Group said its board is assessing the revised offer while continuing to engage with PSP regarding the terms and conditions. It said there is no certainty that a binding offer will be received or that any transaction will eventuate.