WELLINGTON, Dec 24 (Reuters) - The China-based major shareholder of New Zealand's biggest rural services company PGG Wrightson Ltd launched a NZ$141 million ($105 million) bid for a majority stake on Friday, sending the shares of its target almost 15 percent higher.
Agria Corp, a 19 percent shareholder, in conjunction with New Hope Group, another China-based concern, is offering NZ 60 cents per share to lift its stake to 50.01 percent in PGG, which has a retail network offering agricultural supplies, livestock trading, real estate, and financial services.
'PGW's business requires restructuring and a refocus on the core businesses of AgriServices and AgriTech to achieve its full potential,' Agria's Chief Executive Xie Tao said in a statement.
It said PGG Wrightson was underperforming and will benefit from a stable cornerstone shareholder, offering the prospect of expansion into China.
PGG shares rose as much as 14.6 percent and at 2324 GMT traded up 12.5 percent at NZ$0.54, albeit on slim volumes. So far this year it has fallen 8.5 percent compared with a 3.3 percent gain for the benchmark NZSX-50 index .
One of PGG Wrightson's other major shareholders, Pyne Gould Corp, said it would sell its 18.3 percent stake into the offer.
The offer will be structured so that shareholders will be able to sell up to 38 percent of their holding, with scaling back if too many are offered.
'Agria has no intention to increase its shareholding above 50.01 percent if the offer is successful, and has committed not to make a further offer at a higher price for a period of 12 months,' Xie said.
Last week PGG Wrightson forecast a lower full-year profit of between NZ$15 million and NZ$18 million against the 2009/10 profit of NZ$23.3 million, citing difficult trading conditions.
It is also involved in seeds and grain in Australia and offers agricultural advice in South America.
It is the biggest company in New Zealand's fragmented agricultural services sector, with about 15 percent share of the NZ$5 billion a year market.
Agriculture is the backbone of New Zealand's economy, accounting for more than half of the country's exports.
(Reporting by Gyles Beckford; editing by Balazs Koranyi) Keywords: PGG WRIGHTSON/ (Gyles.Beckford@thomsonreuters.com)(+644-471-4231)(Reuters Messaging: gyles.beckford.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Agria Corp, a 19 percent shareholder, in conjunction with New Hope Group, another China-based concern, is offering NZ 60 cents per share to lift its stake to 50.01 percent in PGG, which has a retail network offering agricultural supplies, livestock trading, real estate, and financial services.
'PGW's business requires restructuring and a refocus on the core businesses of AgriServices and AgriTech to achieve its full potential,' Agria's Chief Executive Xie Tao said in a statement.
It said PGG Wrightson was underperforming and will benefit from a stable cornerstone shareholder, offering the prospect of expansion into China.
PGG shares rose as much as 14.6 percent and at 2324 GMT traded up 12.5 percent at NZ$0.54, albeit on slim volumes. So far this year it has fallen 8.5 percent compared with a 3.3 percent gain for the benchmark NZSX-50 index .
One of PGG Wrightson's other major shareholders, Pyne Gould Corp, said it would sell its 18.3 percent stake into the offer.
The offer will be structured so that shareholders will be able to sell up to 38 percent of their holding, with scaling back if too many are offered.
'Agria has no intention to increase its shareholding above 50.01 percent if the offer is successful, and has committed not to make a further offer at a higher price for a period of 12 months,' Xie said.
Last week PGG Wrightson forecast a lower full-year profit of between NZ$15 million and NZ$18 million against the 2009/10 profit of NZ$23.3 million, citing difficult trading conditions.
It is also involved in seeds and grain in Australia and offers agricultural advice in South America.
It is the biggest company in New Zealand's fragmented agricultural services sector, with about 15 percent share of the NZ$5 billion a year market.
Agriculture is the backbone of New Zealand's economy, accounting for more than half of the country's exports.
(Reporting by Gyles Beckford; editing by Balazs Koranyi) Keywords: PGG WRIGHTSON/ (Gyles.Beckford@thomsonreuters.com)(+644-471-4231)(Reuters Messaging: gyles.beckford.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.