Olam International, a Singapore-based global integrated supply chain manager of agricultural products and food ingredients, announced a full takeover offer for NZ Farming Systems Uruguay, seeking to expand its interests in New Zealand's food production.

Olam offered 55 cents per share cash for NZFSU, a 34 per cent premium to its last trading price of 41 cents, valuing the target at $134 million.

The Singapore company acquired an initial 14.35 per cent in NZFSU last September, and another 4.1 per cent tranche from the receivers of Rural Portfolio Investments in May. As part of the takeover, it has entered a lock-up agreement with PGG Wrightson to buy its 11.5 per cent stake in NZFSU.

The South American dairy farm developer was set up in 2006 to export New Zealand's intensive dairy farming techniques. Its expansion plans were disrupted when the global economic crisis hampered its ability to debt-fund the business, while drought in Uruguay cut milk production.

PGG Wrightson will continue to provide asset management and investor relations services to NZFSU under a five year management contract entered into in Nov. 2006, according to the statement.

"The sale of our equity interest in NZFSU would not impact on its close working relationship with NZFSU which has been fostered since its inception in 2006," said Wrightson chairman John Anderson.

Anderson said Olam's stated intention to support the capital requirements of NZFSU was good news for the South American company, allowing it to complete its planned investments and support its growth trajectory.

"We view the ongoing relationship between NZFSU and PGW as an important part of that, as PGW is an efficient supplier of farm inputs and services required by NZFSU," Anderson said.

Olam has been actively seeking to add to its food production assets. In 2008, it acquired 25 per cent of Dairy Trust, the owner of cheese maker Open Country Cheese. Olam operates an integrated supply chain for 17 agricultural products and food ingredients in 60 countries.

Temasek Holdings, which has a holding in GuocoLeisure, the company once known as Brierley Investments, owns about 14 per cent of Olam. Kewalram Chanrai Group owns 36.7 per cent and managers of Olam hold about 16 per cent.