Listed Otago farming group Reid Farmers is merging with Pyne Gould Guinness Ltd as the major shareholder in both - Pyne Gould Corporation - binds its farming interests into one company.
The new company, Pyne Gould Guinness Reid Farmers Ltd, will be based in Dunedin.
The all scrip deal boosts PGC's shareholding in the Reid Farmers business from 44 per cent to 68.5 per cent, and three additional PGC directors will join the Reid Farmers' board.
The initial board will comprise five PGC directors and five other existing directors of Reid Farmers, with senior executives to be announced once shareholder approval is given for the merger.
Reid Farmers shareholders will meet towards the end of August to approve the merger, but documents including directors' reports and independent reports will be sent to shareholders in about three weeks.
Reid Farmers chairman Bill Baylis said the company's independent directors believed a merger with PGC was the best strategic option to boost shareholder value.
Farmer shareholders have said they believed the merger was inevitable, given PGC's hold on Reid Farmers, but at least the deal would enable the two companies to operate throughout the South Island.
PGC reported a profit of $7.18 million for the six months ended December 31, down from $9.34 million a year ago. Last year, it bought Dunedin-based Frontline Finance.
Reid Farmers reported a profit after tax for the six months ended December of $2.7 million, up 62 per cent.
- NZPA
Pynes combines farm interests with Reid buy
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