Separate takeover offers - from China and Singapore - are ramping up for listed agricultural companies PGG Wrightson and New Zealand Farming Systems Uruguay (NZFSU).
NZFSU is headed for delisting from the New Zealand stock exchange, if Singapore-based Olam International's 100% takeover is successful.
In a year or more PGG Wrightson (PGG-W) could face a similar fate depending on the long-term intentions of its new majority owner, China-based Agria Corp.
Craigs Investment Partners broker Chris Timms said NZFSU was already fully controlled by Olam, before the offer for the remaining 22%, and would - as an Olam-subsidiary - be delisted.
On the question of PGG-W, Mr Timms noted Ngai Tahu had recently taken a 7% stake and the New Zealand company Livestock Improvement Corp had lent $10 million toward funding the Agria offer.
"PGG-W could potentially be delisted in the future, but that depends on Agria's's long-term plans," Mr Timms said of the various shareholdings and interests being staked in PGG-W at present.
Singapore-based Olam International Ltd yesterday advised NZFSU it wanted to increase its 78% stake to 100%; offering $37.6 million for the 22% stake it does not already own.
In September last year Olam, a Singaporean-based commodity trading company, concluded its majority purchase of NZFSU, having gained 78% acceptances from shareholders.
The final offer of 70c a share valued the 78% Olam stake at $133 million at the time.
Olam's total investment in the NZFSU takeover, which became a subsidiary of Olam, was $120.3 million.
At the time of gaining the 78% stake, NZFSU had successfully set up 16 New Zealand-style dairy farms in Uruguay, but large land purchases and consecutive financial losses of almost $38 million had left it short of an estimated $88 million it needed to convert a further 49 properties.
Olam was expected to inject up to $60 million into cash-poor NZFSU and possibly seek an equity raising estimated at $35 million to $55 million from shareholders in the future.
A Taranaki dairy farmer, who was one of the remaining minority shareholders in NZFSU, said that Olam was not offering a high enough price to mop up the 22% stake in the company it did not already own.
Rob Poole, of Hawera, who has visited Uruguay several times, said the offer of 70c a share did not appear to recognise a fundamental improvement in the business in Uruguay and the market generally since the previous takeover offer last September, even though land and livestock prices had improved.
Mr Poole - who controls 1.8 million of the company's 244.23 million shares with Clare Poole - said the offer was not good enough because Uruguay had experienced the same lift in dairy prices as New Zealand and the milk price which farmers were receiving there was comparable to the Fonterra price in NZ.
Other minority shareholders included Kevin and Diane Goble, of New Plymouth (2.5 million shares); Kevin and Jaculyn Honeyfield, also of New Plymouth (1.5 million shares); Hapua Koko Forests Ltd, of Leigh (1.35 million shares); Thomas and Anne Lees, of Red Beach (1.25 million shares); and Christopher and Dorothy Putt and CA Nominees (one million shares).
Mr Poole said media reports from Uruguay in February this year quoted a 13% rise in land prices.
Prices for crops such as soy and milk and beef prices have all increased substantially compared with a year earlier.
Meanwhile, Agria Corp's partial takeover went unconditional yesterday in its offer for PGG-W in its bid to gain 38.3% of the shares it does not already own (equating to 31% of the company); on top of the earlier purchase of an 19.01% stake in PGG-W from shareholder Pyne Gould Corp.
The combined stakes, at 50.1%, give a controlling interest, which is valued at more than $227 million. Agria has given a commitment not to seek to increase its stake further during the next 12 months.
