Shares in Australian Agricultural Company Ltd (ASX: AAC) are up 5.8% to $1.17 at the time of writing off the back of rumours Minerva Foods is circling the cattle breeder as an acquisition target.
According to The Australian speculation is mounting Brazil's Minerva Foods is sounding out the Australian Agricultural Company for acquisition after Minerva's CEO Iain Mars was spotted in Australia.
According to the article "there has been noise" about potential corporate activity surrounding Minerva and AAC, but nothing is in writing yet.
AAC's released disappointing full year results yesterday including a statutory EBITDA loss of $35.3 million at $13.6 million – down from $45 million at FY17.
While AAC maintains it has a "strong balance sheet with significant liquidity" results showed its net operating cash flow was negative $39.9 million, from a positive operating cash flow of $29.3 million in FY17.
Earnings have been hit by increased competition according to AAC, but other agricultural stocks are certainly faring better in the current environment, with agribusiness Elders Ltd (ASX: ELD) shares up more than 80% on its share price of $4.99 at this time last year to sit at $9.03 at the time of writing and Ruralco Holdings Ltd (ASX: RHL) also generally tracking up over the last 12 months.
