PGG Wrightson says "no comment" on report of possible $600M buyout
By Sophie Boot
July 10 (BusinessDesk) - PGG Wrightson says it has no comment on Australian media reporting that ASX-listed agribusiness company Elders is looking to buy it for $600 million.
A column in The Australian says Elders may seek to raise A$300 million via a rights issue to help fund the purchase, with the remainder funded via debt. The PGG Wrightson board "met on Friday to discuss the sale of the business and speculation is building that Elders has already been told that it is the preferred bidder", The Australian reported.
PGG Wrightson said it "does not have any comment on this speculation", while Elders has issued a statement to the ASX, stating that it has "not made any definitive proposal" to acquire Wrightson and it "evaluates all possible opportunities against a range of factors and will only pursue acquisitions that make compelling strategic and financial sense for our shareholders."
The rural services firm is indirectly controlled by China's Agria Corp, which owns a 50.2 percent stake via Agria (Singapore), but that stake has come 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. It has been previously reported that Agria wants to sell its stake in Wrightson, and Credit Suisse (Australia) and First NZ Capital are running the sale process, having been previously hired to run a strategic review of the business.
Wrightson shares recently traded at 65 cents and have risen 5 percent this year.