UPDATE - Rural services company Wrightson today said it intended to make a full takeover offer for rival Williams and Kettle (W&K).
On Friday Wrightson secured a 19.9 per cent stake in W&K through a stand in the market.
W&K chairman, John Bayly said in a statement the company had
not sought the offer, but added the company had been aware rationalisation was likely in the rural services sector.
"W&K's strong performance over recent years, the calibre of its staff and its strategic position within the industry had inevitably made it an attractive target," he said.
He said W&K will make further announcements as required under the Takeovers Code, but in the meantime recommended W&K shareholders wait for further information.
On Friday, Wrightson outbid a Fonterra-Pyne Gould Guinness (FPGG) joint venture to secure the 19.9 per cent stake at $4.67 a share, but only after a flurry of counterbids starting from $4.25 a share.
Today Wrightson said it would make a takeover bid for the remaining shares in W&K at $4.70 a share.
Shareholders will be offered a choice of cash or cash and scrip.
The announcement followed talks between the two companies in Napier today.
Wrightson chairman Keith Smith said the move was friendly.
"While this has the appearance of a takeover for legal reasons, in reality it will be more a merging of two proud and like-minded companies," he said in a statement.
Mr Smith said the rural services industry was fragmented.
"By combining Wrightson and Williams & Kettle you have a unique opportunity to initiate, drive and influence consolidation in the sector."
He said if sucessful with the full takeover Wrightson would invite three Williams & Kettle directors to join the Wrightson board.
Until the Wrightson stand, Sir Selwyn Cushing was W&K's largest shareholder, with a 19.9 per cent stake.
Shares in Wrightson closed today up 13c at $1.85, while W&K fell 14c to $4.41.
- NZPA
