Elders Limited wants to sell all its business operations, including its Rural Services division, in an attempt to return value to shareholders.
But speculators believe it could be part of a strategy to shore-up the division with new money from potential partners – including overseas investors.
Macquarie Private Wealth division director Paul Kirshner said the company had struggled with reported debts of about $400 million – largely because of ill-conceived investments made some years ago – before the tenure of chief executive officer Malcolm Jackman.
"They tried to branch out and expand and that's put a noose around their neck for sometime, which has really hamstrung the company," he said.
Investments have included the Futuris Automotive Interiors, employing about 1700 people, and which Elders has been trying unsuccessfully to sell.
It also includes a 50 per cent stake in Tasmanian timber processing and export company SmartFibre, which Elders managed to sell for net cash proceeds of $3 million last month.
But its Rural Services division, the core of which has operated since 1839 – three years after South Australia was proclaimed – is the jewel in the company's crown and Mr Kirshner says the pink shirts might not be done yet.
"Someone from overseas, in particular, may see this as their cornerstone into Australia to give them opportunity to build a Rural Services business. It may be the first stage for someone who might want to build on a fertiliser basis, for example," he said.
"Elders could be thinking, 'okay, we get an investor, or a joint venture partner, and we can still run this business from Currie Street, Adelaide, and set up a really good business'."
Elders rejected a merger proposal from Tasmania's Ruralco Holdings Limited, which owns a 12 per cent share in the company.
Mr Kirsher said this could have inspired the company to open its doors to wider interest.
"Has Jackman said, 'okay boys, if they're serious and they want to pay us X amount of dollars, what about if we try and remain independent?'"
"I wouldn't mind betting that his thought process was to put it out there … to get someone in to help them so they are able to reinvigorate the company."
Mr Jackman told Stock Journal that Elders had put its Rural Services division up for sale so it could "control the situation".
The board was expecting more players, such as Ruralco to keep "knocking on their doors" and wanted to look after the "best interests of shareholders, staff clients, suppliers and financiers".
"Rather than end up with that piecemeal approach where someone else is running the agenda, we've decided to say we'll run the process for the business," Mr Jackman said.
"The result could be a merger with someone such as Ruralco, or it could be an outright sale that leaves the listed company as a shell that could be liquidated, or it could be somebody coming in and becoming a cornerstone investor.
"It's way too early to speculate, but the process does cover the full gambit of all Elders' businesses."
If a full sale was made, Mr Jackman was confident the business would continue as Elders.
"A big chunk of what you'd be buying is the brand and relationships that go with that," he said.
"One would expect that is going to be key to it – retaining all the staff and all the businesses on the way through."
Regional Development South Australia chairman Rob Kerin was concerned for Elders' staff.
"Elders have been battling for a while, so this didn't come as a huge surprise," he said.
"But they do have some very loyal, long- term staff. You hope that whatever way it goes, the staff will be looked after."
The Rural Services division includes 214 rural branches, 94 real estate and insurance stores and 157 real estate franchises.
It includes a network of 14 rural branches in New Zealand, along with two insurance stores and live export investments, and a feedlot in Indonesia and wool investments in China.
The division employs about 2400 people, and had sales revenue of $1948 million, according to the company's 2011 annual report.
Market analysts have estimated the Rural Sevices division to be valued at $250m to $375m.