17 Aug 2010

Rival takeover bid for NZ Farming Systems Uruguay

8:32 am on 17 August 2010

A Uruguayan agricultural company has launched a takeover offer for New Zealand Farming Systems Uruguay.

Union Agriculture Group is offering 60 cents a share, five cents more than the takeover offer by Singapore-based Olam International.

Union Agriculture has a 1.65% stake in New Zealand Farming Systems Uruguay, which it had built up since late March.

Olam already owns 18.5% of New Zealand Farming Systems Uruguay, and has the support of fellow shareholder PGG Wrightson, effectively giving it a 30% stake.

Market commentator and fund manager Brian Gaynor says Olam is in a better position to take control, despite the higher offer by Union Agriculture Group. The latter, he says will have more trouble getting to a 50% control since Olam already has a higher stake.

Mr Gaynor says the Accident Compensation Corporation (ACC) has a 7% stake in the company, so it will play a big role in the outcome.

Meanwhile, Farming Systems Uruguay is urging shareholders to sit tight.