Whole greater than sum of parts

Why did the receivers of the Crafar farms not offer the properties individually rather than only attempting to sell them all as a job lot?

I’ve asked this question several times and it’s been based on a misconception because the receivers did offer the farms separately or together.

A comment from JC yesterday pointed to a column by Fran O’Sullivan who explained:

“But KordaMentha receiver Brendon Gibson confirms there was no real difference between the way the Crafar farms were marketed here and overseas.

The wording used in the advertising material in New Zealand was quite explicit in what was being offered. “There is the potential to purchase a single property, a selection of properties, or the entire portfolio,” the advertisement stated.

This was patently clear in copies of the NZ advertisements which Bayleys placed.

The firm had been instructed to market the portfolio to the widest potential buyer audience possible and secure the best possible outcome by maximising the value of its clients’ property assets.

The receivers are duty-bound to get the best price.

Given there would be a much larger market for individual farms than the whole lot as a package I’d have thought that selling them separately would have raised more money than selling them all together.

Obviously not in this case where the value of the whole is greater than that of the sum of the parts.

It could be that those interested in single properties thought they’d get a bargain and didn’t offer enough. It could be that decent offers were made for the better properties but not enough was offered for the run-down ones.

There might be other explanations, but whatever the reason, the best offer was from  Natural Dairy but was turned down by the Overseas Investment Office. The next best offer was from Shanghai Pengxin and both were for all the farms as a package.

One Response to Whole greater than sum of parts

  1. scrubone says:

    I wonder how long it’s going to be before someone goes and gets a big loan and buys them all, and then sells them one by one to the Chinese who are trying to buy them.

    The whole thing is stupid.

    Like

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