PGW - PGG Wrightson

[Balance]

So at 2013 the PE will be down to about 8 if sp stays at 54c... At a PE of 10 that'd place the sp at about 61c and you'd wait 3 years to get there. What a bargain! (Not!)

PGW Mgt have to work some miracles to get a far better return on shareholders funds that Craigs currently believe they can to make PGW worth buying into. Can they work the miracles? Its a pretty strong and expirienced mgt team. Perhaps they can.

No need for miracles, Belg-me-ole-mate.

PGW is a turnaround story and that's what investors are buying or avoiding - have a look at the earnings and share prices of RBD and even, Wrightson, as their operations were turned around in the past. Who would believe RBD's sp would go back to above $1.00, let alone $2.00+. Likewise, who believed Wri would go from 40 cents at one time to over $2.50. That is the beauty of the market!

The market and analysts will always be several steps behind - on the way down as well as on the way up.

Meanwhile, I am having some decent laughs at the poor attempts at trying to calculate, double calculate and triple calculate PGW's financial position. That's not what financial analysis is about! You either know how to do it or you don't.

[h2so4]

No need for miracles, Belg-me-ole-mate.

PGW is a turnaround story and that's what investors are buying or avoiding - have a look at the earnings and share prices of RBD and even, Wrightson, as their operations were turned around in the past. Who would believe RBD's sp would go back to above $1.00, let alone $2.00+. Likewise, who believed Wri would go from 40 cents at one time to over $2.50. That is the beauty of the market!

The market and analysts will always be several steps behind - on the way down as well as on the way up.

Meanwhile, I am having some decent laughs at the poor attempts at trying to calculate, double calculate and triple calculate PGW's financial position. That's not what financial analysis is about! You either know how to do it or you don't.

I think PGW has a long way to go before it "is a turnaround story"

[GR8DAY]

.....My 2pennies worth.....I believe the turn-around story is happening now. I suggest some of the number crunchers here will have it right and things as they stand could perhaps be better for PGW. Personally I dont get into that side of things and work more from a common sense angle and use of my now well tuned "gutometer".....my only interest is seeing the share price head north and I believe this will come about because of PGWs intrinsic link to the food/agri business. Food supply to the world will be THE industry of the near future..and the future is now. China in particular needs the expertise and hands-on knowledge that PGW is a world leader of.......thus Agri's 19% stake. I wouldnt be at all surprised to see them increase their holding.....esp with the SP languishing at these levels......what an amazing opportunity for them. China is awash with cash and needs to secure it's food/farming future. The market in general does not number-crunch to the extent of some of our experts on this forum.......if it did most listed co's wud be trading at under half what they currently are. Sentiment will rule and be reflected in the SP at some stage....possibly sooner than some wud expect. Amen

[kiwi_on_OE]

Gr8day/Snoopy - Reading the release to the exchange from PGW regarding their sale of NZS shares - no comment about the price escalating if Olam increases their offer, only that it is conditional on Olam getting 50%. Is it a poorly worded/defined msg? Or is there no escalation clause? Given the brevity of the release, I couldn't even be sure about the complete accuracy of the '50%' statement, I wonder if Olam could purchase the stake if they held less than 50%. Could it be tempting for them to buy the PGW stake at 55c and flick it to UAG for 60c?

Percy - Still sure about your 'experienced' board comment?

[percy]

Gr8day/Snoopy - Reading the release to the exchange from PGW regarding their sale of NZS shares - no comment about the price escalating if Olam increases their offer, only that it is conditional on Olam getting 50%. Is it a poorly worded/defined msg? Or is there no escalation clause? Given the brevity of the release, I couldn't even be sure about the complete accuracy of the '50%' statement, I wonder if Olam could purchase the stake if they held less than 50%. Could it be tempting for them to buy the PGW stake at 55c and flick it to UAG for 60c?

Percy - Still sure about your 'experienced' board comment?

Yes.Very experienced,Sir John Anderson,Bruce Irvine,George Gould have all been there before.I doubt were will see the agreement,but I donot recall any previous takeover where the company in PGW's position did not have escalator clauses.I would expect PGW board would have sort legal advice.And George Gould has a law degree.

[Snoopy]

Gr8day/Snoopy - Reading the release to the exchange from PGW regarding their sale of NZS shares - no comment about the price escalating if Olam increases their offer, only that it is conditional on Olam getting 50%. Is it a poorly worded/defined msg? Or is there no escalation clause?

Kiwi , there is no separate 'escalation clause' because there is no need of one. It is all covered in the takeovers code. 55c is Olam's first offer. At the offeror's discretion the code allows Olam to increase that original offer but not to decrease it. Sir John Anderson can huff and puff all he likes. But neither he nor any of the directors can change the takeover's code.

SNOOPY

[Snoopy]

I wonder if Olam could purchase the stake if they held less than 50%?

Anyone can legally buy shares up to 20% of those on issue without invoking the takeover code. But they cannot hold between 20 and 50 percent, which is why the offer has a minimum acceptance condition of 50.1%.

Could it be tempting for them to buy the PGW stake at 55c and flick it to UAG for 60c?

This is legally possible, but Olam would have to gain acceptances from 50.1% of NZS shareholders first. But this is very unlikely with another higher bid on the table already.

SNOOPY

[root]

The offer is subject to required regulatory approval and Olam obtaining not less than a 50% shareholding. Surely the only party with an "out" is Olam? i.e. letting the offer lapse

[Snoopy]

The offer is subject to required regulatory approval and Olam obtaining not less than a 50% shareholding. Surely the only party with an "out" is Olam? i.e. letting the offer lapse

The offer will lapse anyway after a prescribed time. Olam has certain rights to extend this time if they so desire. Once the offer lapses then PGW will be released from any share sale obligation to Olam as a matter of course, unless of course they have already sold their NZS shares to Olam during the offer period.

SNOOPY

[Snoopy]

....my only interest is seeing the share price head north and I believe this will come about because of PGWs intrinsic link to the food/agri business. Food supply to the world will be THE industry of the near future..and the future is now. China in particular needs the expertise and hands-on knowledge that PGW is a world leader of.......thus Agri's 19% stake. I wouldnt be at all surprised to see them increase their holding.....esp with the SP languishing at these level. Sentiment will rule and be reflected in the SP at some stage...

FWIW GR8DAY, I agree with you. But you and I are not the only people that know this. The question is how much of this share price rise you are looking for has already happened? The market is telling me a 50% rise in profit is already priced into PGW. Agria further boosting their stake would mean a bid for control (50.1%).

SNOOPY