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Cushing family's H&G to buy 2.2% Wrightson stake from Agria

Cushing family's H&G to buy 2.2% Wrightson stake from Agria


By Paul McBeth

April 1 (BusinessDesk) - The Cushing family's H&G vehicle has agreed to buy a 2.2 percent stake in rural services firm PGG Wrightson from Agria Corp. for $8.3 million.

H&G has agreed to pay 49 cents a share for 17 million Wrightson shares, matching Friday's closing price. Agria owns 351.6 million shares, or 46.6 percent of the rural services firm, having divested a 7.2 percent holding in December when Ngāi Tahu Capital withdrew from a seven-year pooling arrangement with Agria and Chinese agribusiness New Hope International.

The Cushings and Agria agreed to the sale on March 29. The transaction will settle either five days after Agria confirms its bankers will let it sell, or 15 business days from the date of the agreement, according to a notice lodged with the NZX.

If the banks don't agree to the deal within 20 working days, the agreement can be terminated by either party.

The transaction includes Agria's entitlement to the upcoming dividend of 7.5 cents per share on April 5.

H&G was the 11th biggest Wrightson shareholder with almost 3.1 million shares, or 0.4 percent of the company as at March 22. Its portfolio also controls Hastings-based farm manager Rural Equities, with a 64 percent stake.

Last month, Agria and its executive chairman Alan Lai, a former Wrightson chair, were fined $220,000 and ordered to pay $30,000 in costs after breaching good character conditions imposed by the Overseas Investment Office.

As part of the settlement with the OIO, Agria agreed to reduce its interest in Wrightson below 50 percent, which it did when Ngāi Tahu took direct ownership of its stake.

Last year, Agria and executive chair Lai settled fraudulent accounting and market manipulation claims brought by the US Securities and Exchange Commission, without admitting or denying the charges.

Agria first bought into Wrightson in 2009, helping bail it out after taking on too much debt in the failed merger with Silver Fern Farms. At the time, the OIO cleared the investment on the grounds that it would create or protect local jobs, boost export receipts, and also included an offer to sell riverbed and foreshore to the Crown.

When Agria set up the joint venture with Ngāi Tahu and New Hope to take control in 2011, the OIO approved it on the grounds that it would boost exports, introduce new technology or business skills to New Zealand, and that the involvement of a key person in an industry of another nation would benefit New Zealand. The earlier investment was also a factor.

The Cushing family has a long track-record with Wrightson. In 2005, H&G sold into a Wrightson takeover of Hawkes Bay-based stock and station agency group Williams and Kettle, and Selwyn Cushing subsequently joined Wrightson's board.

Selwyn Cushing stayed on as a Wrightson director until 2012, overseeing the merger with Pyne Gould Guinness, the aborted Silver Fern Farms deal, and the introduction of Agria as a cornerstone in the business. David Cushing acted as an alternative Wrightson director for Alan Lai in 2010.

(BusinessDesk)

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