PGW - PGG Wrightson

[RRR]

With due respect, I dont see any logic in your argument mouse. Do you pay any taxes or are you retired? Let us begin there. Saving is individual responsibility and not for the state to do it. Raising taxes will only do harm. The problem is all our money is stuck in the expensive, and currently illiquid property market. Asset rich and cash poor!

[winner69]

$1 per share became a fantasy as soon as 442.6m PGW shares at an average price of 54c were issued in 2009. That increased the number of PGW shares on issue by 140%.

SNOOPY

A few years ago market cap was over $700m - if it got back there PGW share about a buck

Isn't a buck a realistic expectation based on all the good things you hear (even from those on thsi forum) about PGW

Things like Agria must think its worth more than 60 cents else they wouldn't be offering that but then they only want the seeds according to percy so they get that cheap and shareholders are left lamenting with the rest and a primamry industries boom will boost eanings ... in theory but PGW have a proven track record of letting these opportunities pass by

Some think the future is good for PGW and if so couldn't they make $60m-$70m a year to support that buck shareprice ..... of vourse not ... never done it in recent times and because the business model is f###ed never likely to

So lets hope that somebody takes out PGW north of 60 cents and put shareholders out of their misery once and for all ... and then let the new owners potter around with it before they realise that it is well and truely f###ed and they wasted their money in buying a dog

Mouse - it is not a matter of saving in this case. It is the inability of many to make a go of this company ..... people have put zillions into this company over the years and probably made no return (collectively) .... is that a good income for peoples 'savings'.

[percy]

If I may rant a bit.The stock and station business [rural supplies] of PGW is an OK business if run well,which Gould should be able to do.
The seeds business is like Coca Cola.You can sell franchises off around the world.What is happenning is PGW are selling "the secret formula".Well not really selling it,giving it away.Crazy,buy the Coca Cola franchise in one country for very little and get the secret formula for the world.Once it is sold,it is gone.Can you see the Yanks paying the Chinese a franchise fee for Coca Cola?That is exactly what is going to happen;NZ farmers will have to pay the Chinese a franchise fee for seeds.
I agree PGW has been miss managed,but to give the secret formula away is just plain crazy.Mouse can see this.
No I do not hold any PGW shares.

[Snoopy]

Chinese must do their own saving. Which they invest in banks giving very low interest. Agria just happens to own one of the banks! So we have crony capitalism buying our companies.

Would you enlighten us as to where you get your information from Mouse? Mine comes from p27 of the Grant Samuel report on the PGW takeover offer.

Agria appears to be largely controlled by chairman Alan Lai with 38% of there shares. Both he and CEO XT are ex Price Waterhouse Coopers, not bankers. There is no mention of Agria ever owning any banking assets and they certainly don't now. Following the sale of Agrias principal business 'Primealights III Modern Agriculture Development Co. Limited' (P3A) to the former Agria CEO, it appears that Agria is little more than a shell company, dwarfed in market capitalization by their potential acquisition target, PGW. My best guess description would is that Agria today is a listed hedge fund, trying to deal its way to corporate respectability.

SNOOPY

[Snoopy]

.... the Chairman of the board who so many thought was going to bring some direction to this outfit seems to have thrown his hands up in despair and waved the white towel by recommending a partial takeover ... without even knowing what his new masters are going to do to turn this around

I think Sir John has had his arm twisted by the 60c offer price being in the middle of the Grant Samuel valuation range. My scepticisim of the valuation stems from the fact that it is only a partial takeover. 60c might be a fair price but what Sir John doesn't say is that shareholders who accept will likely have 60% of the shares they tender returned to them. With the takeover premium removed as the market trades on, those remaining shares are only going to be worth around 47c each at best by my calculations.

Than means the real value of the takeover bid for shareholders is only:

0.4x60c + 0.6x47c = 52c

This is below the valuation range regarded as fair by Grant Samuel. Thus directors should have said the Agria share offer should be rejected as being too low.

SNOOPY

[mouse]

I agree with Snoopy. The real bid, for control, is only 52cents for shareholders. I think I have to sell into this offer though since I can at least get 60cents for 40% of my 10,000 shares. If it was a full takeover I might not sell. But this offer leaves me with little option.
Page 53 of the 'Target Company Statement' tells us that Mr Liu Yonghao is vice Chairman of MinSheng Bank. New Hope is the largest shareholder in MinSheng Bank, Chinas seventh largest commercial bank.
Further, page 53 again, Mr Liu is also a member of the Chinese Peoples Political Consultative Conference economic committee. Crony Capitalism.
So there is a convergence between business and politics in China. They are using their wealth to take over target companies around the world. We hand over our cash to Govt and thus have little personal savings. Due to high taxes and low wages.
Unless we take the matter seriously we will have New Zealand companies helping to develop China and not giving sufficient attention to NZ and Oz.
Further, PGGWrightson employs over 2,000 people. Many in Kiwi land. If they get thrown out of work the Kiwi taxpayer picks up the cost once they run out of cash.

[Balance]

I agree with Snoopy. The real bid, for control, is only 52cents for shareholders. I think I have to sell into this offer though since I can at least get 60cents for 40% of my 10,000 shares. If it was a full takeover I might not sell. But this offer leaves me with little option.
Page 53 of the 'Target Company Statement' tells us that Mr Liu Yonghao is vice Chairman of MinSheng Bank. New Hope is the largest shareholder in MinSheng Bank, Chinas seventh largest commercial bank.
Further, page 53 again, Mr Liu is also a member of the Chinese Peoples Political Consultative Conference economic committee. Crony Capitalism.
So there is a convergence between business and politics in China. They are using their wealth to take over target companies around the world. We hand over our cash to Govt and thus have little personal savings. Due to high taxes and low wages.
Unless we take the matter seriously we will have New Zealand companies helping to develop China and not giving sufficient attention to NZ and Oz.
Further, PGGWrightson employs over 2,000 people. Many in Kiwi land. If they get thrown out of work the Kiwi taxpayer picks up the cost once they run out of cash.

Farmers in NZ have borrowed $46 billion against their farms. Just 1% of that money will buy control of PGW.

What does that tell us about the mindset and mentality of the farming sector?

[mouse]

Farmers in NZ have borrowed $46 billion against their farms. Just 1% of that money will buy control of PGW.

What does that tell us about the mindset and mentality of the farming sector?

Exactly Balance. People are putting cash into farms etc and allowing a prime NZ agricultural company to be swallowed by an overseas company. At the end of it, the taxpayer will have to put up the cash to do real research into NZ farming needs. Which at present is being paid for by companies such as PGGWrightson.

[RRR]

Quote : Crony Capitalism.
So there is a convergence between business and politics in China.

No surprises there and practiced by every country around the world.

Quote : They are using their wealth to take over target companies around the world.

That is capitalism. It is now the turn of China unfortunately and they have cash. China is communist only for name sake-they follow capitalistic/totalitarian principle.

Quote : We hand over our cash to Govt and thus have little personal savings. Due to high taxes and low wages.

I am really confused. You are saying NZ taxes are high, but in your previous comment you said you want to see the taxes raised to 50%! I dont think NZ wages are that low-it is just relative and depends on who you compare with. Some beneficiaries even travel around the world using unemployment benefits only!

I am just contesting the facts you detailed, but I think they are based on just your assumption.

[mouse]

RRR, I am not saying taxes should rise to 50%, I think they are at that level now! If our taxes rise, including rates, motor vehicles etc, we would be paying more than 50%. Most unpleasant.
Our brand of capitalism should be robust enough to prevent farmland and iconic companies falling into the control of overseas buyers. It is only hapening with PGGWrightson because they went broke and are lost in the fog of restructuring. A sort of commercial blind mans bluff. We dont know where the prize is.
So in this situation of course we are able to be tripped up. Having a blindfold on is no fun. But it does not mean we should surrender control of our iconic companies.