Elders Talks Down PGG Wrightson Tilt
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Already smarting from a slide in its shares because of a weak earnings update last Friday, Elders was quick to deny claims in The Australian newspaper that it was preparing a $300 million fund raising to help pay for the purchase of NZ rural group, PGG Wrightson.
The Australian’s report had Elders ready to trigger a fund raising for the deal.
But Elders rejected the reports.
“Elders has not made any definitive proposal to acquire PGG Wrightson,” the company told the ASX before trading yesterday morning.
"Elders evaluates all possible opportunities against a range of factors and will only pursue acquisitions that make compelling strategic and financial sense for our shareholders.
“Elders will update the ASX in due course if appropriate to do so,” the company added. That’s not to say it hasn’t been looking - it has and analysts have valued Wrightson (which is controlled by a Chinese group that wants to exit) at around $600 million.
Elders shares steady at $7.20. The shares are only a few cents above the most recent low of $7.085 they plunged to on Friday when the trading update and forecast of a flat profit because of the spreading drought in eastern Australia, knocked more than 17% off the price.
Wrightson shares though jumped more than 6% yesterday to 67 cents even though the Elders’ statement was in the market.
That reversed a recent slide and they are up 8% in the past three months, but down more than 4% in the past month.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.