New bidder in the hunt for PGG Wrightson

PGG Wrightson independent director Keith Smith. Photo / Martin Sykes

Another potential bidder has thrown its hat into the ring for takeover target PGG Wrightson, says the listed rural services company.

Last month Chinese companies Agria and New Hope Group launched a joint partial takeover bid for PGG Wrightson at 60c a share, valuing the company at $454.8 million.

PGG Wrightson today said it would issue a target company statement in response to the Agria offer on Monday, including a report from independent adviser Grant Samuel.

"In the meantime, the [takeover response] committee notes that it has received an approach from another party who has indicated an interest in making a full takeover offer for PGG Wrightson," the company said.

"That party, who the committee considers to be a bona fide potential bidder, has requested that it be permitted to undertake due diligence in relation to PGG Wrightson and that its identity remain confidential until it has completed due diligence."

Shares in PGG Wrightson gained ground in early trading today, closing up 4c at 59c by mid morning.

The Business Herald's Stock Takes column last month reported speculation that Canadian agricultural products and services company Agrium could make a bid.

Agrium last year acquired Australian company AWB, whose assets include a 50 per cent stake in rural supplies firm RD1.

A spokesman for Agrium at that time it did not comment on market speculation.

PGG Wrightson said its had agreed to let the unidentified bidder undertake due diligence.

"While there is no certainty of a better bid emerging following due diligence, the committee considers that this is a material development about which PGG Wrightson shareholders and employees need to be informed."

PGG Wrightson recommended shareholders wait until nearer the April 15 closing date of the Agria offer before making a decision.

"Any takeover situation is dynamic and this means that circumstances could change materially before the nominated offer closing date."

A spokesman for the company said the board and senior management would not make no further comment at this stage.

Agria is already a 19.01 per cent share holder of PGG Wrightson and has a pre-bid agreement from Pyne Gould Corporation to buy its 18.3 per cent stake.

The Agria offer is conditional on holding 50.01 per cent of the voting rights and the company has said it does not intend to acquire more than that through its offer.