nz farming systems Uruguay

[bung5]

Can somone explain to me the tie up with PGWrihtsons.....if there is one?.....and how do we find out about these Uruguay tours, if and when the next one is? Anyone think these shares are a "screeming" bargain at the moment or just fairly priced sub 40c?

Gr8day hope you picked up shares in the end

[Snoopy]

if olam takeover failed, I reckon the sp will back to where they were.

UAG have already expressed interest at 60c. Despite UAG pulling their offer, I think 60c is the downside if Olam pulls the pin on their offer. It was rather strange of Olam to say they will not extend the offer past September 24th if they don't get their 50.1% shares. Perhaps Olam were confirming the original deadline was just a gee up to investors to accept promptly? Perhaps they consider with the director recommendation behind them 50.1% of shares are in effect in the bag already?

Having put aside money for the upcoming rights issue I, like the NZS directors, won't be selling any of my NZS shares to Olam. My biggest issue is the underlying CAPM valuation method used. The implied discount factor of 12.5% is derived from an historic cost of equity of 14.9%. IMO this is high because of historic funding problems NZS has faced. The Olam buyout and subsequent capital raising will fix this. So again in IMO it is quite inaccurate to assume this 14.9% equity cost figure will be so high after the Olam restructuring, as the CAPM calculation requires. In addition I believe the 2% discount allowance that Grant Samuel for Uraguayan denominated costs getting out of control is also too high, because US interest rates are being kept artificially low verses other country bond rates. Therefore in my assessment, with a discount rate of around 10%, that 70c from Olam is still below fair value.

In addition because the need to raise capital has been so well documented those shareholders that can't or won't put more capital into the company will have already sold into the Olam offer after it closes. So I see those shareholders that remain hanging onto their shares in anticipation of new cheap shares to be theirs via the rights issue. If my logic is right, and all other things are equal, we should see the NZS share price rise in the short term above 70c if the Olam takeover offer is successful.

SNOOPY

[bung5]

Well I will be one of the first buyers if the share price does drop if the deals fails. On the other hand happy to see the company succeed and good luck to those that continue holding.

[mikew]

UAG have already expressed interest at 60c. Despite UAG pulling their offer, I think 60c is the downside if Olam pulls the pin on their offer. It was rather strange of Olam to say they will not extend the offer past September 24th if they don't get their 50.1% shares. Perhaps Olam were confirming the original deadline was just a gee up to investors to accept promptly? Perhaps they consider with the director recommendation behind them 50.1% of shares are in effect in the bag already?

Having put aside money for the upcoming rights issue I, like the NZS directors, won't be selling any of my NZS shares to Olam. My biggest issue is the underlying CAPM valuation method used. The implied discount factor of 12.5% is derived from an historic cost of equity of 14.9%. IMO this is high because of historic funding problems NZS has faced. The Olam buyout and subsequent capital raising will fix this. So again in IMO it is quite inaccurate to assume this 14.9% equity cost figure will be so high after the Olam restructuring, as the CAPM calculation requires. In addition I believe the 2% discount allowance that Grant Samuel for Uraguayan denominated costs getting out of control is also too high, because US interest rates are being kept artificially low verses other country bond rates. Therefore in my assessment, with a discount rate of around 10%, that 70c from Olam is still below fair value.

In addition because the need to raise capital has been so well documented those shareholders that can't or won't put more capital into the company will have already sold into the Olam offer after it closes. So I see those shareholders that remain hanging onto their shares in anticipation of new cheap shares to be theirs via the rights issue. If my logic is right, and all other things are equal, we should see the NZS share price rise in the short term above 70c if the Olam takeover offer is successful.

SNOOPY

I insist that if olam takeover failed, the sp will drop below 50c, UGA already left the table, the game is over.

[bung5]

just under 5% to go. Cutting it close

[elZorro]

just under 5% to go. Cutting it close

Olam now hold about 56% of NZS, and going up each day. Price holding at 69c/70c. At what point will the market decide enough of the company setup has been transferred at a bargain price? Let's wait and see if the new capital can help turn a profit quickly.

Disc: bought some this month.

[Meddler]

Make that 61% as of the last announcement. I'm happy to continue to keep the small holding I've got for now, though would definitely have accepted the offer if I thought it likely I'd be wanting to sell the shares in the short term.

[Snoopy]

At what point will the market decide enough of the company setup has been transferred at a bargain price?

Some $US60m is needed to complete dairy farm development. A 2 for 3 cash issue at $NZ0.5 will raise $NZ81m, or near enough to $US60m. I guess if remaining shareholders can afford to shell out $1 for every 3 shares they own, then enough of the company will have been transferred to Olam!

SNOOPY

[Snoopy]

Olam now hold about 56% of NZS, and going up each day. Price holding at 69c/70c.

Director Graeme Wong has let 55,000 of his 145,000 shares go to Olam, leaving him with 90,000. Norgate has sold 600,000 shares into the offer leaving him a mere 15,000. As the tide goes out one director selling out to get cash for the rights issue and to make sure he can look his new masters at Olam in the eye. The other director revealed as having no clothes on? Norgate to lose his NZS directorship while Wong will keep his. Only a few hours to go before the offer closes. Anyone know how Olam with a 70% shareholding may effect NZS's NZX50 index rating? Will the lessening of liquidity make a difference?

SNOOPY

[COLIN]

"Olam/Louis Dreyfus merger, to create world's third largest agricultural trader." Olam seems to have come a very long way in a very short time. One tends to be very wary of such rags to riches companies, noting the likes of Allco, MFS, Babcock & Brown, etc., but I am just an old fogie.