Dairy Holdings looks set to stay in New Zealand ownership with existing shareholders said to be buying the remainder of one of the country's largest dairy groups.
Receivers are to make an announcement about the sale at the end of the week, however Fairfax Media understands it has been bought by the existing shareholders who have pre-emptive rights.
The 33.6 per cent stake in Dairy Holdings came on the market after South Canterbury Finance (SCF) was tipped into receivership on August 31, 2010, prompting a $1.59 billion payout under the Government Guarantee Scheme.
Dairy Holdings operates 58 dairy units on 14,201 hectares in the South Island and is one of the key assets of SCF receivers have been trying to sell.
Former SCF chairman Allan Hubbard had transferred the stake to SCF in 2008 in a bid to shore up the company, said to be worth $75.7 million at the time.
SCF receivers had been trying to sell the Dairy Holdings stake jointly with with four other shareholders, creating a 62.5 per cent controlling stake.
Receivers McGrathNicol would not comment on the sale but a spokesperson said an announcement would be made at the end of the week.
"As this has been a shareholder-led sale rather than a receiver-led sale we would rather comment came from Dairy Holdings.
"We have contacted Alan Pye (20.8 per cent shareholder) to be prepared for media comment by the end of the week."
Pye who already has significant interest in South Canterbury dairy farms, and Tauranga couple Dale and Colin Armer, who own a 16.6 per cent stake of Dairy Holdings, are the only shareholders who have not put their shares up for sale.
Shareholders in Dairy Holdings have pre-emptive rights to buy the holdings being offered for sale by another shareholder.
Armer said yesterday he was not in a position to comment.
"There is going to be an announcement later in the week."
He had stood down as the chairman during the process of the sale, he said, and still worked closely with Mr Pye despite a legal issue last year, when other shareholders had voted to get rid of the pre-emptive rights.
Pye could not be contacted yesterday.
Dairy Holdings chairman Bill Baylis said yesterday the Overseas Investment Office would not be involved as the buyers were New Zealand based and expected an announcement at the end of the week.
"The shareholders have been offered the stake but I cannot tell you the outcome of that."
A Land Information NZ spokesman said at this point there had been no application to the Overseas Investment Office from an overseas buyer interested in buying in to the Dairy Holdings operation.
Three United States investors who own 8.3 per cent stakes and Christchurch businessman Humphry Rolleston who owns 3.9 per cent have been trying to sell their shares through Murray and Co, which had been combined with the SCF stake and marketed, with a January 19 deadline for bids.
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