Parties to buy back farming systems shares

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Parties that sold 14 million NZ Farming Systems Uruguay (NZS) shares to a PGG Wrightson subsidiary agreed today to buy back the shares.

Rural Portfolio Investments (RPI) and interests associated with Murray Flett said they had taken the action to avoid any reservations about the timing of the transaction and the involvement of related parties.

On Friday, PGG Wrightson said subsidiary PGG Wrightson Investments had acquired the NZS shares from RPI and the Flett interests for $1.50 per share.

The vendors sold their NZS shares to raise money to buy shares in PGG Wrightson's capital raising to fund its purchase of 50 percent of meat company Silver Fern Farms.

The investors bought about 9.7 million PGG Wrightson shares at $1.80 each, which is about 22 percent of the total raised.

RPI and the Flett interests are buying the NZS shares back at the same price they paid for them – $1.50.

PGG Wrightson today said it affirmed its policy to maintain a significant holding of NZS shares, and its view that acquiring NZS shares at $1.50 would have represented excellent value.

It would reconsider the transaction and other opportunities to acquire NZS shares later.

The decision by RPI and the Flett interests would not affect the placement of 43.4m shares in PGG Wrightson on Friday, PGG Wrightson said.

It would receive the $78.1 million from the capital raising tomorrow and settle the Silver Fern Farms transaction as planned.

Shares in PGG Wrightson fell 27c to $1.83 on Friday after the company announced it was selling the new shares at $1.80 each, compared to the $2.10 previous price.

The company's share price was up 2c in morning trading today to 185.

- NZPA