Chinese company bid for PGG Wrightson

PGG Wrightson chairman Keith Smith. Photo / Martin Sykes

Chinese agricultural company Agria Corp is aiming to lift its shareholding in PGG Wrightson from the current 19 per cent to a majority stake in a bid with New Hope Group, one of China's largest agricultural and food corporations.

The offer will be made by Agria (Singapore) which would be jointly owned, directly or indirectly, by Agria and New Hope, Agria said today.

Agria (Singapore), a wholly-owned subsidiary of Agria Corp, now holds 19.01 per cent of PGG Wrightson.

The offer price would be 60c per share for 235m further shares, and if the offer was successful the resultant Agria (Singapore) shareholding in PGG Wrightson would increase to 50.01 per cent. PGG Wrightson shares closed at 48c yesterday, having ranged between 67c and 43c in the past year.

A pre-bid agreement had been entered into with 18.3 per cent shareholder Pyne Gould Corp which had committed to accept the partial offer in relation to all of its shareholding, Agria said.

Pyne Gould said that as the Agria bid was a partial takeover offer, the acceptance of Pyne Gould's shares would be subject to scaling which may result in it continuing to own some shares following the closing of the offer.

Agria chief executive Xie Tao said PGG Wrightson had under-performed on expectations in recent times, including a recent profit downgrade, and restructuring and a refocus on the core businesses of AgriServices and AgriTech was needed.

If the offer was successful PGG Wrightson would remain as a New Zealand-based listed company, and Agria had no intention of increasing its shareholding above 50.01 per cent and had committed not to make a further offer at a higher price for a period of 12 months.

New Hope's chairman and founder Liu Yonghao was a highly regarded businessman and was vice-chairman of MinSheng Bank, one of China's largest commercial banks, and also a member of the Chinese People's Political Consultative Conference economic committee, Agria said.

New Hope Group was "looking to strengthen its core focus with global partnerships, to contribute to the bilateral agriculture partnership between China and New Zealand, and to contribute to the future growth of New Zealand's agriculture industry."

- NZPA