The Vitalharvest Freehold Trust (ASX: VTH) share price is shooting like a beanstalk in 2021. Since the first trading day of the year, shares in the real estate investment trust (REIT) have appreciated by 21.4%.
Presently, its shares are swapping hands for $1.19 each – up 0.42% on yesterday’s close. By comparison, the All Ordinaries Index (ASX: XAO) is up by around 4.7% in 2021 and 0.72% today.
Let’s take a closer look at what’s driving the Vitalharvest share price higher.
Tug-of-war pushes Vitalharvest share price higher
So, what’s affecting Vitalharvest shares? A bidding war for the company, that’s what. Back in November 2020, news broke that Macquarie Group Ltd (ASX: MQG) subsidiary Macquarie Infrastructure and Real Assets (MIRA) proposed to buy all shares in the trust for $1.00 per unit. At the time, this represented a 27% premium on the last closing price.
Since then, private equity firm Roc has entered the fray. Both parties have subsequently been submitting ever-increasing bids for the company, sending the Vitalharvest share price higher.
Roc’s most recent proposal improved its offer for the company from $1.12 to $1.16 per share. On top, Roc is willing to pay a 2.5 cent dividend on each share for “rent received to 31 December 2020.”
Today, MIRA fired back. The company matched Roc’s offer to buy shares for $1.16 per unit and pay a 2.5 cent dividend on each share. Responding to the offer, Vitalharvest said:
[Vitalharvest] is assessing whether [MIRA]’s further revised proposal would, or would be likely to, provide an equivalent or superior outcome for [Vitalharvest] unitholders than the Modified Roc Offer.
[Vitalharvest] will update the market as soon as possible.
It should be noted that today’s Vitalharvest share price is half a cent above the offer from both companies, when factoring in the dividend payment.
What is Vitalharvest?
Vitalharvest owns one of the largest aggregations of berry and citrus farms in Australia. These are located in rural and regional New South Wales, South Australia and Tasmania and are leased to Costa Group Holdings Ltd (ASX: CGC).
In further good news for the company, a Rabobank report released last month predicted agricultural commodity prices will continue heading north.
Vitalharvest share price snapshot
Over the last 12 months, the Vitalharvest share price has appreciated by 72.5%. As outlined above, most of those gains have occurred in the last 6 months. Vitalharvest’s value has appreciated 52.6% since mid-October last year.
Based on the current share price, the company has a market capitalisation of $219.2 million.
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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post Why the Vitalharvest (ASX:VTH) share price is up 21% in 2021 appeared first on The Motley Fool Australia.
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