Reid-Pyne merger on the cards

By Phil Boeyen, ShareChat Business News Editor

Wednesday 13th June 2001

Listed rural group Reid Farmers (NZSE: REI) and Canterbury-based Pyne Gould Guinness are looking at a possible romp in the hay.

Reid Farmers says it is in discussions with Pyne Corporation about a merger with its wholly owned stock and station subsidiary, Pyne Gould Guinness.

Any merger would likely bring increased buying and marketing benefits and also make geographic sense. Reid Farmers currently focuses on Otago and Southland while PGG's interest lies further north in Canterbury and Marlborough.

Pyne Corporation, which is a major shareholder in Reid Farmers with around a 45% stake, has also emerged as a strong player in the finance sector after recent expansion and acquisitions.

Its current finance businesses include Allied Finance, Frontline Finance and Marac, as well as the finance division of Pyne Gould Guinness. It's not known at this stage if the PGG finance arm would be included in any merger.

Earlier this year Pyne Corporation completed its takeover of previously listed South Eastern Utilities, which had cash reserves of around $68 million after selling Wairarapa electricity assets in 1999.

Reid Farmers put in a strong showing for the first six months of its current financial year with a net surplus of $2.66 million and a forecast of an improved annual result.

The company is advising shareholders not to buy or sell shares until a further announcement about the merger is made.

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