19 Jul 2010

Takeover bid for NZ Farming Systems Uruguay

12:27 pm on 19 July 2010

The largest shareholder in New Zealand Farming Systems Uruguay is making a takeover offer worth $110 million for the dairy farm developer.

Olam International of Singapore owns 18.45% in Farming Systems Uruguay, and is bidding 55 cents per share for the rest of the company.

That's a 34% premium to Farming System Uruguay's closing price on Friday.

Olam says the offer has the support of the second largest shareholder, PGG Wrightson, which has a 11.5% stake.

It says it has a lock-up agreement in place with PGG Wrightson to buy its holding.

Olam bought a 14% stake in Farming Systems Uruguay last year and another 4% in May from the receivers of Rural Portfolio Investments.

The company also has a 25% stake in Open Country Dairy, an exporter.

Farming Systems Uruguay advises shareholders not to make a decision about selling their shares, until it receives an independent appraisal on the merits of the offer.

The company has said it expects a full year loss of $US10 million.

PGG Wrightson says its seeds and rural services businesses in South America are not affected by the proposed takeover.

Shares in Farming Systems Uruguay rose 11 cents to 52c on Monday. Shares in PGG Wrightson rose by 2c to 49c.