PGW - PGG Wrightson

[Snoopy]

Add Agria's stake of 44.3% to what they have accumulated, and they are guaranteed to have majority control when they launch a full takeover bid.

Yes, but if Beijing Holdings Limited make a bid, then any shares they hold prior to the bid being launched are excluded from voting on the deal. So it would only make sense to pick up shares before the bid was lodged if you were fairly sure those shareholders selling to you would have voted against the bid.

Could Beijing Holdings be looking to do a scheme of arrangement? That has a lower success threshold (75% of outstanding shares must vote yes) than a full bid. If Agria were to vote 'yes' for a scheme of arrangement, that would go a long way to reaching a 75% of outstanding shares voting 'yes' goal.

Otherwise, there's no logical explanation for anyone to pay a premium to build up towards a 10% stake in the company.

ACC have quite a good reputation for astute portfolio management. If it was them that sold, then the credibility of Beijing Holdings Ltd bid might be enhanced? I think there is a core group of PGW shareholders who 'don't want to sell to the Chinese'.

SNOOPY

[Snoopy]

Here is what Mr Wiki knows
https://en.wikipedia.org/wiki/BAIC_Group

A car company acquiring PGG Wrightson? That seems far fetched.

What about this?

https://www.bloomberg.com/profile/company/BJHLDZ:HK

Beijing Holdings Ltd

"Beijing Holdings Limited operates as an investment holding company. The Company operates in Hong Kong."

Director Lei Zhengang is in the "Offshore Leaks Database"

https://offshoreleaks.icij.org/nodes/103687?e=true

"This database contains information on more than 785,000 offshore entities that are part of the Paradise Papers, the Panama Papers, the Offshore Leaks and the Bahamas Leaks investigations."

and Chang Ling

http://hkmdb.com/db/people/view.mhtm...isplay_set=eng

A retired Kung Fu movie actress. If the takeover gets off the ground, I wouldn't want to be part of the management team to 'get the chop' from her!

SNOOPY

[sb9]

Add Agria's stake of 44.3% to what they have accumulated, and they are guaranteed to have majority control when they launch a full takeover bid.

Otherwise, there's no logical explanation for anyone to pay a premium to build up towards a 10% stake in the company.

They probably would be mopping more on market for cheaper than 2.75 a piece.

[dameofdiv]

Beijing Holdings BAIC Limited https://www.hkgbusiness.com/en/compa...s-Baic-Limited is a subsidiary of Beijing Capital Agribusiness Group: https://www.cbinsights.com/company/sunlon

More English information about BCAG here: http://www.agri.citic/html/en/Animal...Agribussiness/

[winner69]

Collapsing oil prices not good for PGW

Didn’t I read that on here somewhere

[Southern Lad]

See PGW announcement this afternoon detailing some background Beijing Holdings BAIC Limited and there representations on their intentions/motivations.

http://nzx-prod-s7fsd7f98s.s3-websit...113/321311.pdf

I note that they say they are not associated with any existing PGW shareholder, however it’s hard to imagine they are a long term holder of only 9.019%. One suspects negotiations are about to start with 44% shareholder Agria.

[Balance]

See PGW announcement this afternoon detailing some background Beijing Holdings BAIC Limited and there representations on their intentions/motivations.

http://nzx-prod-s7fsd7f98s.s3-websit...113/321311.pdf

I note that they say they are not associated with any existing PGW shareholder, however it’s hard to imagine they are a long term holder of only 9.019%. One suspects negotiations are about to start with 44% shareholder Agria.

Yup - agree that must be the game plan.

BABL has bought out the 2 potentially troublesome shareholders in PGW who with 10% could have blocked a full takeover by BABL - once Agria sells to it.

Also, 44% + 9% > 51% = control.

[kiora]

Might have something to do with this
"Due to the outbreak of African swine fever last year and the resulting supply disruption amid efforts to contain Covid-19, food prices in China jumped 21.4 per cent in February, largely driven by a 135.2 per cent hike in pork prices – the biggest increase on record"
"China’s consumption of meat jumped from 7 million tonnes in 1975 to 75 million tonnes in 2017; the country now consumes roughly 50kg of meat per capita"
https://www.scmp.com/week-asia/opini...ill-feed-china
A good time to be invested in agri sector?
Always a good idea to be part invested anyway but PGG Wrightson?

[Snow Leopard]

Might have something to do with this
"Due to the outbreak of African swine fever last year and the resulting supply disruption amid efforts to contain Covid-19, food prices in China jumped 21.4 per cent in February, largely driven by a 135.2 per cent hike in pork prices – the biggest increase on record"
"China’s consumption of meat jumped from 7 million tonnes in 1975 to 75 million tonnes in 2017; the country now consumes roughly 50kg of meat per capita"
https://www.scmp.com/week-asia/opini...ill-feed-china
A good time to be invested in agri sector?
Always a good idea to be part invested anyway but PGG Wrightson?

There is a saying 'When you're in a gold rush sell picks and shovels'.

So I presume that the thinking is 'When in a bacon shortage sell pigs*** shifting shovels'


Interestingly due to my portfolio rebalancing and SP movements PGW is, at the time of writing, my largest NZX holding, but that will change.

[Balance]

Might have something to do with this
"Due to the outbreak of African swine fever last year and the resulting supply disruption amid efforts to contain Covid-19, food prices in China jumped 21.4 per cent in February, largely driven by a 135.2 per cent hike in pork prices – the biggest increase on record"
"China’s consumption of meat jumped from 7 million tonnes in 1975 to 75 million tonnes in 2017; the country now consumes roughly 50kg of meat per capita"
https://www.scmp.com/week-asia/opini...ill-feed-china
A good time to be invested in agri sector?
Always a good idea to be part invested anyway but PGG Wrightson?

I doubt that BABL is buying PGW for what it is today.

PGW arguably has the best interface with the agribusiness sector in NZ.

PGW under the right owner with deep pockets and market access will be able to be used very effectively to leverage into various sectors of agribusiness.

Think of Synlait - pre and post the entry of Bright Foods.