Risks Loom as Lynch Faces Delisting in Hasfarm Acquisition Scheme
Lynch Group Holdings Limited proposes a scheme of arrangement for acquisition by Hasfarm Bidco at a 23% premium, with unanimous board support and an independent expert endorsement. Shareholders will vote in November on a deal that would delist Lynch from the ASX.
- Scheme consideration of $2.155 cash per Lynch share
- 23% premium to last closing share price before announcement
- Unanimous Lynch Board recommendation subject to no superior proposal
- Independent Expert concludes scheme is fair and reasonable
- Scheme subject to shareholder and court approvals, with key dates in November and December 2025
Background and Proposal
Lynch Group Holdings Limited (ASX – LGL), a leading wholesaler and grower in the floriculture sector, has announced a recommended scheme of arrangement for its acquisition by Darwin Aus Bidco Pty Ltd (Hasfarm Bidco). The proposed all-cash offer values Lynch at $2.155 per share, representing a premium of approximately 23% to the last closing price before the deal was announced on 19 August 2025.
The scheme consideration reflects a cash price of $2.245 per share less a fully franked dividend of 9 cents per share paid by Lynch in September 2025. This dividend was declared prior to the scheme announcement and is not conditional on the transaction proceeding.
Board and Expert Endorsements
The Lynch Board has unanimously recommended that shareholders vote in favor of the scheme resolution, subject to no superior proposal emerging and the Independent Expert maintaining their positive conclusion. The independent expert, KPMG Financial Advisory Services, has assessed the scheme as fair and reasonable and in the best interests of Lynch shareholders.
Key Lynch directors, including CEO Hugh Toll and independent non-executive directors, intend to vote their shares in favor of the scheme. Major shareholders controlling approximately 38.5% of shares, including Next Capital and Bridge International Holding, have also confirmed their support.
Scheme Mechanics and Conditions
The scheme requires approval by the requisite majorities of Lynch shareholders at a meeting scheduled for 21 November 2025, followed by court approval expected on 27 November 2025. If approved, the scheme is expected to become effective on 28 November 2025, with payment of the scheme consideration and transfer of shares to Hasfarm Bidco anticipated by 9 December 2025.
Hasfarm Bidco intends to fund the acquisition through a combination of cash reserves and syndicated debt facilities totaling over A$295 million. The scheme is not subject to a financing condition, and Hasfarm Bidco has entered into call option deeds covering nearly 20% of Lynch shares to support the transaction and deter competing bids.
Implications for Lynch and Shareholders
Upon implementation, Lynch will become a wholly owned subsidiary of Hasfarm Bidco and will be delisted from the ASX. Hasfarm has indicated its intention to continue operating Lynch’s business without major changes and to retain employees, while conducting a detailed post-acquisition review.
Shareholders who vote against the scheme or abstain will still be bound by the outcome if the scheme is approved and implemented. The scheme provides shareholders with immediate cash certainty and removes exposure to operational and market risks inherent in Lynch’s business, including geopolitical and supply chain risks associated with its operations in Australia and China.
Risks and Considerations
Risks highlighted include the possibility of delays or failure to obtain court approval, emergence of a superior proposal, and the inherent risks of Lynch’s business operations such as market volatility, foreign exchange exposure, and regulatory changes. Tax implications vary by shareholder circumstances, and professional advice is recommended.
Transaction costs are estimated at approximately $5 million if the scheme proceeds, with $2.5 million non-recoverable costs if it does not. Break fees of $2.7 million apply under certain termination scenarios.
Bottom Line?
As Lynch shareholders prepare to vote, the market awaits whether Hasfarm’s premium offer will secure approval and reshape the Australian floriculture landscape.
Questions in the middle?
- Will any superior proposal emerge before the shareholder vote or court approval?
- How will Hasfarm integrate Lynch’s operations across Australia and China post-acquisition?
- What are the detailed tax implications for different classes of Lynch shareholders under the scheme?
