Wrightson wins share scramble

Craig Norgate's Wrightson splashed out $20 million yesterday to capture 19.9 per cent of rural services company Williams & Kettle.

It out-gunned a rival bid from dairy giant Fonterra and Pyne Gould Guinness.

Wrightson got from zero to 19.9 per cent by paying $4.67 a share - a premium of 33 per cent on the previous day's closing price of $3.50.

"That's certainly a big price compared to where Williams & Kettle has traded before," said UBS NZ's head of research sales, Richard Leggat.

He said Williams & Kettle was a cyclical business that would find life "a bit tougher" next year if the currency stayed where it was.

The day turned crazy for the brokers at ABN Amro Craigs - acting for Wrightson - when they discovered in the morning that Fonterra and Pyne Gould Guinness were making a stand in the market at $4.20 a share.

The two companies, operating as Town and Country Agri-Investments, were seeking 10.1 per cent of the company - a strategic size, as it can block a full takeover.

Sharebroking firm Forsyth Barr was on the hunt for stock on behalf of Town and Country.

 

"Taking a joint stake in Williams & Kettle allows Pyne Gould to explore opportunities with Williams & Kettle and RD1, Fonterra's rural services subsidiary," said Pyne Gould chairman Bill Baylis.

The brokers at ABN scrambled to get a $4.25 a share offer into the market for Wrightson.

Then, hearing that Forsyth Barr might be sounding out shareholders at $4.35, they put the Wrightson offer up to that level.

The opposition soon matched it.

But Wrightson went on to secure a 4.9 per cent holding from Alliance Capital for $4.67 a share.

It also picked up nearly 4 per cent from the Rotorua Energy Charitable Trust.

The higher price meant paying $4.67 to sellers who had accepted at lower levels.

By the end of the day, brokers at ABN Amro Craigs believed Fonterra and Pyne Gould Guinness had picked up about 3 per cent.

Williams & Kettle is a Hawkes Bay rural services company.

It reported a record after-tax profit of $14.36 million for the year to July 31. That was 125 per cent up on the previous year.

It is a target because of plans for industry consolidation.

"Industry rationalisation is necessary and has benefits for all of our clients," said Barry Brook, acting chief executive of Wrightson.

 

"We know Williams & Kettle very well, and think it is a well-run and managed company."

Williams & Kettle has 35 branches, mainly in the east of the North Island.

It offers rural management, real estate, finance, grain and seed and farm supplies.

It declined to comment on the competing bids.

Company secretary James Wright said: "Prices are all over the place. We'll just have to wait and see what happens."

- additional reporting: agencies