Rural service rivals to merge

Craig Norgate

Rural service rivals Wrightson and Pyne Gould Guinness (PGG) are to merge.

The proposed merger, which will be put to shareholders in September, will see Wrightson merged into PGG to become PGG Wrightson, which will remain listed on the New Zealand Stock Exchange.

Wrightson shareholders will get around 1.028 PGG shares for every Wrightson share they currently hold, dependent on any capital changes or changes in equity.

The move follows a period of consolidation in the rural services industry, which last year saw Wrightson out-bid PGG for control of listed Hawke's Bay stock and station company Williams and Kettle.

"PGG Wrightson is founded on the premise that New Zealand agriculture must 'punch above its weight' if it is to succeed in the face of intense and growing international competition," PGG chairman Bill Baylis said.

"A strong national rural servicing business will be in a better position to achieve this than a highly fragmented industry."

Wrightson is 50.01 per cent owned by the Craig Norgate-led Rural Portfolio Investments, while Pyne Gould Corporation (PGC) owns 55.4 per cent of PGG.

Both shareholders have indicated that they support the merger proposal in principle. They will hold 22 per cent and 30 per cent respectively in the merged company.

Based on pro forma financial data, the company will have an initial turnover of $1.1 billion and total assets of almost $900 million.

PGG Wrightson will employ about 2700 staff, with a corporate office in Christchurch, administrative offices in Dunedin and Napier and branch operations in centres throughout New Zealand.

- NZPA