Hawke's Bay-based rural services company Williams and Kettle is being targeted in a bidding war between two rival stock and station agencies, each seeking a 10 per cent stake in it.
The Hawke's Bay company reported a record after-tax profit of $14.36 million for the year to July 31, up125 per cent on 2003. Its shares shares jumped 20c to a then-record high of $3.17 shortly after the announcement, soaring from $1.23 at the start of the year.
Last night it closed at $3.50/share.
Today a joint venture of Fonterra and South Island stock and station agency Pyne Gould Guinness Ltd bid $4.20 per share for a 10.1 per cent stage in Williams and Kettle. Fonterra and PGG have formed Town and Country Agri-Investments Ltd to make an overnight offer and a stand in the market.
The bid would give PGG a foot-hold in the North Island, and Fonterra a new window on the stock and station sector after selling its stake in Wrightson.
Later in the morning Wrightson made its own bid: $4.25/share for a cornerstone holding in Williams and Kettle, saying it was responding to PGG's bid through Town and Country.
Wrightson acting chief executive Barry Brook said that Wrightson's intentions were constructive: "We know Williams and Kettle very well and think it is a well run and managed company," he said.
"We are determined to play a central role in any industry rationalisation," Mr Brook said. "This move is friendly and aimed at ensuring that there is an orderly and logical process to achieve this." He said the Wrightson offer of $4.25 was at a 21 per cent premium over yesterday's closing price of $3.50.
Both Wrightson and the Town and Country venture are offering price escalation clauses for a period of nine months -- saying that if they pay a higher price for Williams and Kettle shares in that time, it will be made available to people who have already sold to them at today's offer.
The Town and Country stand in the market opend at 12.30pm today, and the company said it would continue until it told the NZX that the bid had been completed or withdrawn.
