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PGG Wrightson 'open to options'

PGG Wrightson 'open to options' amid reports firm is putting out feelers for sale

By Paul McBeth

March 15 (BusinessDesk) - PGG Wrightson is "open to options" after the firm hired investment bankers for a strategic review of the business and Australian media reported that it is preparing non-disclosure agreements with interested parties.

The Australian Financial Review's Street Talk column today reported First NZ Capital bankers are getting non-disclosure documents signed by interested parties ahead of a planned auction of the NZX-listed company controlled by Agria Corp. The report names ASX-listed Ruralco Holdings and Elders, Agrium-owned agribusiness Landmark, and Champ Private Equity as potential suitors, while Hong Kong-listed CK Life Sciences is said to be interested in Wrightson's seeds business.

Christchurch-based Wrightson hired Credit Suisse (Australia) and FNZC to run a strategic review of the business, looking at the firm's capital structure and identifying the best route to pursue growth. Last month when reporting first-half earnings, the company said the review was ongoing and it would provide more detail on the outcome later this year.

Wrightson general manager of strategy and corporate affairs Julian Daly said that was still the case.

"The board remains open to looking at all options identified within the scope of the review and no decisions have been made at this time," Daly said in an email. "The board will continue to update the market as this develops."

Wrightson shares recently traded at 62 cents, valuing the company at $468 million, and are near the eight-year high 63 cents reached on Feb. 28.

The rural services firm is indirectly controlled by China's Agria Corp, which owns a 50.2 percent stake via Agria (Singapore). It built a majority interest in 2011, paying 60 cents a share, having bought an initial 13 percent stake in 2009 for $36 million. That shareholding is currently under review by the Overseas Investment Office over whether it still meets the regulator's 'good character' test after being delisted from the New York Stock Exchange last year.

The size of the stake would mean any buyer would be obliged to make a formal takeover bid under New Zealand's Takeovers Code.



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