* FS Africa consortium offers 10.25 pence per share
* Offer represents premium of 97.1 pct to stock's Tuesdayclose (Adds analysts comments, background; updates share movement)
By Richa Naidu and Karen Rebelo
May 15 (Reuters) - British conglomerate Lonrho Plc,whose roots go back more than a 100 years to colonial Africa,received a buyout offer valuing the company about 175 millionpounds ($266 million), double its market value at the close onTuesday.
Lonrho said an investment vehicle controlled by Swissbillionaire Thomas Schmidheiny and Swiss investor Rainer-MarcFrey had offered 10.25 pence for each Lonrho share, a premium of97.1 percent to Tuesday's closing price.
Lonrho's agribusiness, which accounts for about 60 percentof revenue, supplies fresh fruit, vegetables, meat and fish toretailers in Africa. The business also has a logistics unit anddistributorship for John Deere agricultural equipment.
"We believe Lonrho has strong long-term prospects, but thesignificant capital required to grow the business over time isevident," Schmidheiny said in a statement on Wednesday.
The company's free cash flow has been negative since 2007,according to Thomson Reuters data and its net income has swungbetween profits and losses for the past several years.
Schmidheiny -- whose estimated net worth of $5.5 billionearned him the rank of fourth-richest man in Switzerland byForbes magazine in 2012 -- declined to comment further.
Frey, the founder and chairman of investment managementcompany Horizon21 and a director of banking group UBS AG, was not immediately available for comment.
"It's a reasonable offer," Daniel Stewart analyst MichaelCampbell said, noting it was about equal to annual revenue.
VSA Capital analyst Edward Hugo said the deal highlightedincreasing interest in the agricultural sector.
"There's a specific focus on African agriculture," he said."Lonrho has the right operational footprint down to benefit fromthis potential massive growth market. These guys think they cando a better job than the existing guys."
Africa's agricultural output, which was valued at $250billion in 2011, is forecast to double by 2020 and reach $800billion by 2030, according to Lonrho's latest annual report.
PROFITS AND LOSSES
The bid vehicle, together with other related parties,already controls 19.9 percent of Lonrho.
Lonrho shares rose about 90 percent to 9.86 pence in morningtrading on the London Stock Exchange on Wednesday. They hadfallen 38.5 percent this year up to Tuesday's close.
The decline in the company's share price is the secondbiggest this year among 166 industrial conglomerates globallywith a market capitalisation of at least $100 million, accordingto Thomson Reuters Starmine.
"The financial performance has been fairly volatile, whichhas disappointed some investors," VSA Capital's Hugo said. "It'salways had a lot of potential, but in the past they've set theirexpectations too high, maybe hyped it up."
Apart from its core agribusiness, Lonrho is the majorityshareholder in airline FastJet Plc. It also owns hotelsin Africa and offers port services such as cargo handling.
Lonrho said the bid vehicle, FS Africa, had the support of Lonrho directors and shareholders representing about 18 percentof its outstanding shares. ($1 = 0.6554 British pounds) (Additional reporting by Patturaja Murugaboopathy in Bangalore,Writing by Brenton Cordeiro,; Editing by Don Sebastian and TedKerr)