PGW - PGG Wrightson

[RGR367]

May not be over expensive at the current prices, if you have a longer term view of their prospects.

With some capital returned then it just becoming cheaper even more, that's what I'm saying Percy

[Snoopy]

A couple of post takeover approval posts for those with a selective memory

Immediately after the AGM the PGW share price was 57c. If we take this as Mr Market's 'reference figure', then this 57c will be split into a capital payout amount and the remainder which is Mr Market's worth of 'PGW Rural Rump'.

On 9th January a 'dissenting to the demerger' shareholder received a full payout on their 9,724 PGW shares of 58c each. I am not clear that this is a result of an 'independent valuation' just before the demerger offer was made. But it does seem to confirm that the board does not work for the benefit of all shareholders. This looks like proof, if any was needed, that the seeds division demerger has destroyed shareholder wealth.

Now fast forward to today and PGW closed at $2.29 on 16-08-2019. That is equivalent to a pre-consolidation price of 23c.

With some capital returned then it just becoming cheaper even more, that's what I'm saying Percy

The capital return was 31cps, added to yesterday's equivalent close price of 23c gives a total post demerger valuation of 54c. And this in the context of an overall market where the NZX50 rose from 8843 to 10704 over the post AGM time period to date, a market rise of 21%.

The kindest interpretation of all this is that as a result of the boards separation proposal, 3cps of value has been destroyed. Over 754m shares this translates to a dollar value loss of:

0.03 x 754m = $22.6m

This is hardly a good outcome for shareholders, except for one shareholder who, with hindsight, borrowed too much to purchase their controlling stake.

Technically RGR327 is correct in that with the capital returned, 'PGW Rural Rump' has become cheaper. But all that means is that we shareholders have lost money in this exercise. I, for one, am not celebrating.

SNOOPY

P.S. Also a long term shareholder in PGW

[mshierlaw]

I bought these a while back for the divies. These started getting smaller & smaller so reason for holding was being tested. Now after the washup we get a decent dividend again, the question for me is ....... can they sustain it? I'm not convinced yet.

To date I have (almost) got ONE NICE DIVIDEND from the sell off of the seeds. Hoping for many more.

[percy]

I think we will see both eps and dividend per share growth, with the dividend yield being over 9% gross yield ,and PGW having the capacity to pay fully imputed divies.

[mshierlaw]

I think we will see both eps and dividend per share growth, with the dividend yield being over 9% gross yield ,and PGW having the capacity to pay fully imputed divies.

Thanks

Looking forward to the old times returning.

[mfd]

Unlisted Rural Equities limited have bought a 2.7% chunk of PGW for around 6.7 million. Looking at previous announcements, they have a war chest from sale of farms of around 40 million looking for alternative investments. I wonder if they'll be back for more?

https://www.usx.co.nz/market_announcements

[Balance]

Unlisted Rural Equities limited have bought a 2.7% chunk of PGW for around 6.7 million. Looking at previous announcements, they have a war chest from sale of farms of around 40 million looking for alternative investments. I wonder if they'll be back for more?

https://www.usx.co.nz/market_announcements

Cushing family taking the opportunity to top up on market and buying out Ngai Tahu's stake at $2.35.

Always right to follow Cushing when he puts his own money in.

A number of interesting scenarios ahead!

[percy]

Looks a possibility.Why else would REL be selling some farms.?
Findlay [pgw chairman] has been a REL director for a long time.
Cushings sold Williams and Kettle into PGW.
Father and son have both had a long associaton with PGW.
I am sure PGW manage some of REL's farms.
REL are also shareholders in our old mate Chris Corrigan's WBA.

Above post 26-6-2019
Today's announcement shows REL's /Cushings interest.
Where to next.?

[Snoopy]

Cushing's REL will have approx $39 mil at the end of the month from their recent farm sales.
Interesting.

That was Percy's observation on 26th June 2019.

Cushing family taking the opportunity to top up on market and buying out Ngai Tahu's stake at $2.35.

Always right to follow Cushing when he puts his own money in.

A number of interesting scenarios ahead!

First disclosure from David Cushing regarding H&G stake in PGW made on 1st May 2019, a purchase from Agria, for a post consolidation equivalent of 2.007m shares. That balance is consistent with the number of shares held by H&G prior to today's announcement. This followed the NZX declaration made on 10th April of the equivalent of 1.7m shares being acquired for $1.80 from Agria , a total cost of $8.33m. I assume there must have been an historically H&G owned 0.307m PGW shareholding balance that made the total up to 2.007m at the time.

Today's (20-08-2019) announcement showed that H&G were also buying PGW shares on market:

(1) On 15 August 2019, through on-market trades, REL acquired 72,238 PGW shares for $158,121.76. That is an average price of $2.19
(2) On 16 August 2019, through on-market trades, REL acquired 27,035 PGW shares for $61,647.91. That is an average price of $2.28
(3) On 19 Aug 2019 came the Ngai Tahu purchase, REL acquired 2,743,463 PGW shares for $6,447,138.05. That is an average price of $2.35

Latest purchases from the Cushings means that 2.842m additional shares have been acquired since 15th August 2019.

This total purchase value of this increased holding was:

$158.1m + $61.6m + $6,447.1m = $6.667m.

So total holding by H&G (including shares held by REL which is more than 20% controlled by the Cushings, which in turn means the REL stake is consolidated within the H&G stake for reporting purposes) is:

2.007m (H&G) + 2.842m (REL) = 4.849m shares, amounting to

4.849m/75.484m = 6.424% of PGW.

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Explanatory Note

I have previously stated on this forum that I thought the Ngai Tahu holding of PGW had been as high as 7.24%. However, what I should have said was that the Ngai Tahu holding in 'Agria investments Asia Limited' (AAIL) was 7.24% (since sold) . AAIL was only a 50.22% shareholder in PGW back then. So the maximum Ngai Tahu holding, indirectly, was:

0.5072 x 7.24% = 3.672%

That is close to the 3.766% that Ngai Tahu were declared as owning prior to the latest H&G acquisitions.

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Over the last year, H&G have invested $6.67m plus $8.33m equals $15m in buying PGW shares. If Percy is right with that $39m H&G war chest, there is more than enough left in the kitty to build the H&G stake to a blocking level of 10%. And H&G have shown they are not averse to 'topping up' on the market.

SNOOPY

[percy]

REL market cap at $4.67 is $152,586,842
PGW market cap at $2.43 is $183,426,322.
Interesting.?