PGG Wrightson shareholders meet today to consider the sale of the company's seeds business. Photo / File
PGG Wrightson shareholders meet today to consider the sale of the company's seeds business. Photo / File
PGG Wrightson chairman Guanglin (Alan) Lai has stepped down as a director and chairman of the rural services group, effective today.
The announcement was made before the group's annual meeting and special meeting in Christchurch, at which shareholders will consider the planned $434 million sale of its seeds division toDanish co-operative DLF Seeds.
PGG Wrightson is just over half owned Agria Corp, which is also chaired by Lai.
Lai, in a statement to the NZX, said: "I will always have great fondness for New Zealand and for PGW.
"The work that Agria has been able to do to benefit PGW and New Zealand is not yet finished, but I think that my time in leading PGW as chair must come to an end as I need to focus on the next phase in my career and spend more time with my family," he said.
"Leadership always needs to be refreshed and I have done everything within my power to lead and benefit PGW over the last 10 years to greener pastures and to greater success," he said.
"I believe in this company and this country. I have been a proud caretaker for this iconic New Zealand company and have full confidence in the board and trust they will continue to serve the shareholders and PGW well into the future," he said.
In the interim, existing director Joo Hai Lee has been appointed as chair effective from tomorrow, with Trevor Burt continuing as deputy chair.
Burt said: "A review of the Board's composition and governance would be undertaken and the market would be updated on outcomes in due course."
In January, the Overseas Investment Office said it was investigating the "good character" status of Agria Corp, after the company was formally delisted from the New York Stock Exchange early last year. Agria owns 50.22 per cent of PGG Wrightson through Agria (Singapore).
A Danish co-operative has offered $434 million for the company's seeds business. Photo / File
Trading in Agria had been halted when an NYSE investigation "uncovered evidence demonstrating that the company and its management engaged in operations contrary to the public interest and not in keeping with sound public policy".
The New Zealand Shareholders' Association (NZSA) has said it will vote against the DLF transaction.
The association said the mostly cash offer from DLF Seeds was attractive at face value, with a $292m capital return attached.
However, that short-term gain would shrink Wrightson to less than half its current size and leave it holding businesses inferior to the grains and seeds division.
"It seems to us that if shareholders accept DLF's offer, they will potentially lose in the long run unless PGW can pull a rabbit out of the hat and grow the rump business," the NZSA said in a statement last week.
The NZSA said it would vote its proxies against the resolution and said raising capital to fund organic growth was "an obvious alternative" to selling its most valuable business.
Agria Corp took control of Wrightson in 2011, having taken a cornerstone shareholding in 2009 to recapitalise the rural services firm in the aborted merger with Silver Fern Farms.
An independent valuation of the DLF transaction by KordaMentha found the offer to be fair to minority shareholders.
If shareholders opt to reject the transaction, that may prompt Agria and the board to take a broader view of the interests of all shareholders, the NZSA said.
The transaction also needs Commerce Commission and Overseas Investment Office approvals.
As well as the risk the transaction could leave Wrightson "a shadow of its former self", association chief executive Michael Midgley said there may also be concern as to whether the sale would be in the broader strategic interest of New Zealand.
Similar arguments were mounted when Agria mounted its partial takeover in 2011, however no local investors were willing to match that price.
While the latest review of the Overseas Investment Act will likely allow ministerial discretion to reject transactions based on national interests, no specific power currently exists.
