PGG Wrightson reveals Zuellig approach

Tuesday 1st March 2011

PGG Wrightson says it has had a buying approach from Hong Kong-based investment company Zuellig Group.

Zuellig Group is interested in buying into PGG Wrightson even though it is subject to an existing partial takeover offer led by Chinese investor Agria, Businessday reported.

"From our perspective, we are looking at a number of options for investment in PGG Wrightson, including potentially a strong cornerstone shareholding position," Zuellig senior group executive Peter Williams was quoted as saying.

PGG Wrightson's head of strategy, Maurice Noone, said there had subsequently been contact from Zuellig but no meeting had yet been arranged.

"They have made contact with us for a conversation but at this stage we have no idea what the nature of the conversation will be," he told NZPA.

The company learned about Zuellig's interest from the media late last week.

Last week PGG Wrightson said a second party's interest in making a takeover offer was not proceeding.

There has been speculation that Canadian group Agrium was interested but the company has never identified the second party.

The issue of control of PGG Wrightson has ruffled farmer groups concerned that competition is maintained among rural service companies.

Agria is seeking to move from 38.3% ownership to control at 50.01% by paying 60 cents a share. That offer is open until April 15.

An independent committee on PGG Wrightson's board has recommended that shareholders accept the offer in the absence of a better one.

The committee has said that while the Agria offer would have merit for shareholders with a near term focus, or who value near term certainty, shareholders with longer term investment horizons may well conclude that the offer undervalues PGG Wrightson's longer term prospects.

PGG Wrightson shares rose 2c to 53 cents today.

The Zuellig Group is a privately owned conglomerate with a turnover of over US$12 (NZ$15.9) billion. The group currently owns and manages investments in healthcare distribution solution and pharmacy services, agri-business manufacturing and distribution and agricultural and materials handling equipment supply and services.

NZPA

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