NZ Farming Systems Uruguay, the South American dairy farmer facing competing takeover bids, has bought its management contract for $4 million from outgoing shareholder, PGG Wrightson Ltd.
The deal, which is subject to bank and bondholder agreement and any shareholder approval, will leave Wrightson as preferred supplier until
at least 2019 and the rural services company will provide Farming Systems with advice and consultation until 2015.
"We are now at a stage where we need our top management to be directly employed by NZS and domiciled in Uruguay," said Farming Systems chairman John Parker in a statement.
"The combination of direct management in Uruguay and ongoing strong relationship with senior PGW Uruguay management will be very positive for NZS."
Last month, Wrightson halted negotiations on internalising the contract, saying it wanted to wait until Singapore's Olam International Ltd. takeover bid of 55 cents a share had been resolved.
Yesterday, Uruguay's Union Agriculture Group trumped Olam's offer, pitching at 60 cents a share. Farming Systems shares were unchanged at a 15-month high 63 cents in trading today.
Wrightson managing director Tim Miles said he supported the change, and committed his company's "ongoing supply and advisory relationship." Wrightson's shares gained 1.9% to 55 cents today.
