Silver Fern Farms sells stake in PGW on market.

Silver Fern Farms, the meat cooperative that’s going public, sold its 10 million shares in PGG Wrightson, taking advantage of the hoopla around Agria’s imminent arrival on Wrightson’s register.

Silver Fern Farms confirmed today it had sold its tranche of 10 million shares in PGG Wrightson at between 73 cent and79 cents per share. The shares jumped 20% to 78 cents on the NZX.China’s Agria, a seed and animal services company that trades on the NYSE, is buying $36 million of Wrightson shares at 88 cents apiece for what amounts to 13% of the existing share capital. The deal gives Wrightson potential entry to the Chinese market and tie-ups on everything from dairy conversion to seeds and finance.

“It was very opportune timing,” said Brent Melville, communications manager at Silver Fern. “It was the best time.”

Silver Fern walks away with a 41% loss on the stake when compared to the $1.20 price of Wrightson in April, when the co-op received the 10 million shares in part settlement of their failed merger.

Silver Fern’s own shares debut on the Unlisted share platform on Oct. 27, the first time members of the public have been able to buy the stock. The meat co-op last week completed its offer for its farmers to exchange shares and subscribe to more. The new capital raised was about $21 million as of the closing date, missing the hoped-for $30 million to $128 million.

Wrightson obtained what was effectively a $25 million loan from South Canterbury Finance to help with settlement, with the finance company holding the right to convert the debt to shares.

Silver Fern first flagged the exit last month. The agreement will open the door to China’s rural sector, which isn’t currently served by a mature rural services company.

Agria and Wrightson will cooperate on seed development, livestock , agricultural services and research, rural services in China, rural financing and dairy conversions along the lines of NZ Farming Systems Uruguay. Over time, Agria will become a major shareholder of Wrightson, they said. 

Businesswire.co.nz

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