Letter to Wrightson shareholders June 2004
OUR INTENTIONS FOR WRIGHTSON –
CRAIG AND BAIRD SPEAK UP. Our intentions boil down to three simple concepts:
VISION PHILOSOPHY TRACK RECORD
Our vision for Wrightson is a vision for all of New Zealand agriculture. We passionately believe that agriculture is the backbone of our economy. We feel a deep sense of responsibility to help ensure that it remains so.
New Zealand’s excellence in agriculture is generally defined by world class on-farm productivity and by farmers and growers working together to market their product to the world. Very little is heard of the agricultural input sector, aside from some notable achievements from innovation.
Our view is that it is absolutely critical that the agricultural input sector makes a significant and ongoing contribution to the overall competitiveness of New Zealand agriculture. In making our bid for Wrightson we are wanting to put our money where our mouths are.
We are driven by a simple philosophy - that you can only satisfy shareholders if customers are satisfied, and you can only satisfy customers if the staff servicing them are satisfied. Whilst we don’t intend to take on management roles, we do intend to spend a lot of time getting to understand the business properly - through the eyes of customers and the staff who are charged with meeting their every day needs.
We’ll do this in a way that brings a level of passion, innovation, responsiveness and accountability that will energise the whole organisation. We want to empower staff to delight customers.
We are brand builders and value creators. We do that by relentlessly focusing on customers, whilst driving through the change necessary to create a culture that supports a sustainable leadership position. Whilst we don’t talk about it comfortably, we both have track records of driving companies to leadership positions where they can influence the shape of an industry.
In Baird’s time at the helm, Mainland grew from a $120 million consumer cheese and butter company to a $2.4 billion Australasian consumer dairy business (now named Australasian Food Holdings and owned by Fonterra).
In Craig’s time at Kiwi Dairies, the business grew from $300 million turnover to $4.4 billion. Craig then led Fonterra through its critical first two years, ensuring that the company didn’t miss a beat at the customer interface and that the merger over-delivered on its promises to shareholders.
We see the challenge at Wrightson similarly. We want to see Wrightson in a leadership role in an agricultural servicing industry that is making a real contribution to the overall competitiveness of New Zealand agriculture. We’ll do that by bringing a level of information and service to customers that they have never dreamed of; and we will create an environment where staff genuinely feel that they can make a difference.
SOME QUESTIONS WE ARE OFTEN ASKED
WHAT IF I’VE ALREADY ACCEPTED? WILL I GET THE SAME DEAL ?
Relax, you will get the same deal as other shareholders under the partial takeover offer, no matter when you have accepted.
WHAT IF I NOW WANT TO ACCEPT FOR MORE SHARES? You can, and we’d welcome it – simply complete the required forms and return them to us. Contact your broker or the registrar, Computershare (09 488 8750), if you need help.
WHAT HAPPENS IF DIRECTORS DO DECIDE TO PAY THE PRE-ACQUISITION DIVIDEND?
You will get that dividend – with consequent adjustments being made to the takeover consideration paid to accepting shareholders and, as a result, the number of redeemable preference shares issued to those shareholders who elect to receive redeemable preference shares as all or part of the consideration for the sale of Wrightson shares pursuant to the partial takeover offer. Many shareholders will be able to use the tax benefits from the imputation credits that attach to that dividend.
WHAT ABOUT ALL THE CONDITIONS OF THE OFFER?
These conditions are either required by the Takeovers Code or are reasonably common in offers. To be clear, unless market conditions change or the Wrightson Board has done something that significantly changes the nature and prospects of the company, then once we reach 50.01 percent we intend to waive all remaining conditions.
WHAT HAPPENS IF RURAL PORTFOLIO INVESTMENTS DOES NOT REACH 50.01 PERCENT?
Our offer will lapse and we would not be able to buy any shares under it. We would be left with our existing shareholding. We have already made it clear that in this case we will review our 13 percent holding with a view to exiting - there won’t be much point in hanging on to it.
I WANT TO SEE YOU GET CONTROL OF THE BUSINESS BUT I WANT TO STAY AS A SHAREHOLDER AND PARTICIPATE WITH YOU. WHAT CAN I DO?
We’d love you to. However, if we don’t get to 50.01 percent, then we end up back at 13 percent and have limited influence on the company. Accordingly, we’d like you to accept our offer for all or most of your shares now to get us there. You can take all or some of your payment in Redeemable Preference Shares and retain some participation if you want. You may sell to us now and buy more shares later once we have 50.01 percent, as Wrightson will still be listed. The key point is that we can’t help Wrightson unless we get to 50.01 percent and we need your shares to do it.
OFFER FOR WRIGHTSON SHARES NOW $1.65. ACCEPT NOW – DON’T MISS OUT.
We have increased our offer price for your Wrightson shares to $1.65 each, and extended the closing date of the partial takeover offer to 23 June 2004 (please see the attached Notice of Variation and the explanatory note below).
– Places the offer within the fair value range presented in the Independent Advisor’s Report by Grant Samuel & Associates. – Applies to all shareholders (including those who have already accepted) whose Wrightson shares are taken up under the offer. – Is a rise of 10 percent from the original offer of $1.50 per share. – Means our price is now at a 33 percent premium over the pre-offer market price.
A SPECIAL DIVIDEND DEPENDENT UPON YOUR BOARD
Along with this variation, we’ve put a proposal to the Wrightson Board that might provide immediate value to you. This proposal would allow Wrightson to return additional value to shareholders by paying part of the offer price by way of a fully imputed pre-acquisition special dividend of up to 14 cents per share. This would allow the value of existing imputation credits, which might otherwise be lost on a change of control, to be passed directly to existing shareholders. Any such special dividend will result in an adjustment in the final price paid by us under the partial takeover offer - with consequent adjustments being made to the takeover consideration, whether paid in cash or in Redeemable Preference Shares (RPS). If you have elected to receive RPS as all or part of your consideration, the adjustment will be in the number of RPS you receive. The extension to the closing date of our offer will allow time for your Board to decide to do this. It is their decision, not ours.
WHAT ARE OUR INTENTIONS FOR WRIGHTSON?
Like you, we are not currently ‘inside the tent,’ which is why we have not given you firm intentions in detail. We do, however, have views about the measures required to drive Wrightson forward from a leadership and performance perspective. Please read the attachment about our views.
HELP US GET TO 50.01%
If we don’t get to 50.01% we are unable to buy any shares under this offer. We need your shares if we are to get into a position to help Wrightson. Please feel free to contact either of us (on 0800 RURALP) if you would like to discuss the offer further. Yours sincerely Craig Norgate Baird McConnon MANAGING DIRECTOR CHAIRMAN
As a consequence of the increase in the offer price under the partial takeover offer to $1.65 per Wrightson share, please note the following consequential changes, when completing the Acceptance Transfer Form and the blue Exchange Offer Application Form: Acceptance Transfer Form Calculate the Total Consideration Payable at $1.65 per Wrightson share being sold. Exchange Offer Application Form Calculate the Takeover Consideration at $1.65 per Wrightson share being sold in order to determine the number of Redeemable Preference Shares to be subscribed for.
Note: If you forget we will adjust your Exchange Offer Application Form for Redeemable Preference Shares so it is consistent with the number of Wrightson Shares you elect in the Acceptance Transfer Form to exchange for Redeemable Preference Shares.
Application has been made to New Zealand Exchange Limited for permission to list the redeemable preference shares and all of the requirements of New Zealand Exchange Limited relating thereto that can be complied with on or before the date of distribution of this advertisement have been duly complied with. However, New Zealand Exchange Limited accepts no responsibility for any statement in this advertisement.