Brokerage Morningstar has stated their belief that the proposed buyout of horticulture company Costa Group (ASX:CGC) by U.S.

fund manager Paine Schwartz is expected to proceed, citing that the firms have entered a scheme implementation deed.

The buyout offer is seen as attractive by Morningstar who highlighted its valuation representing a 22% premium to Costa’s last closing price before the proposal and a 3% premium to their standalone valuation.

Further, Morningstar has upgraded their fair value estimate to A$3.20 from A$3.18 as they anticipate the deal’s progression.

Morningstar said, ‘We expect Costa’s robust earnings growth to persist in the near term.’ The brokerage forecasts Costa to expand its Australian market share to approximately 20% over the next five years from 15% at present.

Out of 10 analysts, 4 rate the stock ‘buy’ or higher, 6 ‘hold’; their median price target is A$3.08, according to LSEG data.

Costa Group’s stock has seen a rise of 12.4% this year, until the last close.

Costa Group is a horticulture company known for its wide range of produce.