Reid, Pyne form a South Island giant

By Nick Stride

Friday 14th September 2001

Shareholders in Reid Farmers have approved a merger with Pyne Gould Guinness, creating the South Island's largest rural services company.

The merged company will be known as Pyne Gould Guinness Reid Farmers. It will have revenues of around $255 million and a net profit of around $12.8 million on 2001 figures. Reid Farmers will issue 44 million shares to Pyne Gould at an equivalent $1.10 a share. On that basis Reid Farmers represents 56% of the merged company.

Pyne Gould, a private unlisted company with a wide spread of shareholders, moves from 44% to 68.5% of the listed company.

Not included in the deal are Pyne Gould's finance company interests, which have been expanding rapidly in the Auckland region. Pyne Gould will appoint a further three directors to the board, giving it five out of ten seats. Chairman Bill Baylis will retain his position.

The new company will have 100 million shares on issue. At Reid Farmers' closing price on Wednesday of $1.22 it will have a market capitalisation of $122 million.

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