Concerns raised by LIC over bid link

Mark Dewdney, LIC chief executive. Photo / Martin Sykes

"Wheels inside wheels" is how Craigs Investment Partners broker Chris Timms describes developments over Ngai Tahu's plans to take a cornerstone shareholding in PGG Wrightson through a joint venture with Chinese companies.

On Friday, Ngai Tahu Holdings confirmed it had finalised negotiations with Agria Singapore and Chinese multibillion-dollar company New Hope Group to take an equity stake in Agria's holding company.

Ngai Tahu's $15 million shareholding would be in the joint venture vehicle between the Agria group and New Hope (which owns the Agria vehicle which made the partial takeover offer for PGG).

Yesterday, dairy-farmer-owned co-operative Livestock Improvement Corporation (LIC) expressed concern at the unauthorised notification to the NZX that it was involved in the Agria Singapore process to take over PGG.

Chief executive Mark Dewdney said LIC's name was unfortunately linked to confirmed parties to the bid for a majority shareholding in PGG.

"We are in discussion with Agria Singapore with a view to extending a loan in support of their bid for a majority shareholding, but no agreement has been reached at this point in time."

Timms said it appeared "lots of bits and pieces going on in the background" were starting to come out.

He questioned whether that information should have been made available earlier to the investors.

LIC was obviously sitting in the background thinking there must be some opportunity for it to be involved in the company.

While Ngai Tahu Holdings' announcement came as a "little bit of a surprise", it probably made sense from the iwi's point of view, Timms said.

Ngai Tahu already had exposure to tourism and seafood businesses in China and it was an opportunity to get involved in an industry that was "probably pretty close to its heart".

It was not a massive holding, but rather an interest, he said.

Maori Party MP Rahui Katene yesterday commended Ngai Tahu Holdings for its "entrepreneurial courage".

- OTAGO DAILY TIMES