Rural Equities, the farm-owning company controlled by Sir Selwyn Cushing and his son David, has bought Ngai Tahu’s 3.63% stake in PGW at $2.35 a share, adding to the 2.66% shareholding of their main investment vehicle H and G.
That and smaller holdings bought on the market by Rural Equities gives the Cushings a 6.42% in the nationwide rural services group.
Gould Holdings, a company controlled by former PGW managing director George Gould, has emerged on the share register with a 0.57% stake. He said he had just bought a few shares when the PGW seeds business was sold and has no plans beyond that at this stage.
The business is much simpler and easy to understand now and more interesting as an investment without the potential complications of the seeds division.
“Seeds was dynamic and exciting, with the intellectual property, but the overseas risk is gone now.’’
There will be speculation about how long PGW’s 44% shareholder Agria Corporation of China will remain involved after the big return of capital following the sale of the PGW seeds business. It is still understood to have debt to pay down and its reputation has been dented by run-ins with the New York Securities Exchange and New Zealand’s Overseas Investment Office.
The OIO required Agria to reduce its shareholding in PGW, which it did by unwinding a shareholder agreement with Ngai Tahu, leaving the South Island iwi with a direct 3.63% stake. Agria also sold shares directly to H and G in March.
A view in the market is that both Agria and Ngai Tahu were interested mainly in having an international interest through the seeds business.
A rural services group operating only in NZ is considered small by their ambitions and Agria could be a seller at the right price.
Rural Equities executive chairman and PGW independent director David Cushing could not be contacted for comment. Nor could PGW chairman Rodger Finlay, also a Rural Equities shareholder and its deputy chairman. He us also a Ngai Tahu director.
Sir Selwyn Cushing used to control Williams and Kettle, the Hawke’s Bay rural services group, merged into the then Wrightson in the early 2000s. Fruitfed, now one of PGW’s best businesses, was part of Williams and Kettle.
In 2005 the merged Wrightson group merged again, this time with Canterbury-based Pyne Gould Guinness, long associated with the Gould family. Sir Selwyn was a director of Wrightson and then PGG Wrightson for several years.
Gould was a director of PGW from 2010 and became managing director in February 2011 to stabilise the business and focus on the core rural servicing activities. His start in the job coincided with the major Christchurch earthquake and the partial takeover bid by Agria to lift its stake from 19% to 50%.
He ended his involvement with the company in mid-2013. He didn’t have a shareholding then and looks to have bought back only in recent months.
Gould, who owns just over half of Gould Holdings, said he has total confidence in the new board and management.
“David knows what he’s doing.”
New chief executive Stephen Guerin ran the retail business when Gould was managing director.
He didn’t have a view on whether or not Agria would stay as a shareholder.
The PGW investment looks to be the first major play by Rural Equities after deciding two to three years ago to pursue investments outside direct farm ownership. It has sold several farms over the last few years and has a market value of nearly $150 million on the Unlisted platform.
