The market approved of the Chinese company Agria taking a stake in PGG Wrightson with an initial lift in PGW”s share price.
However, the subscriber-only section of the NBR raised questions which the ODT mentions too.
Silver Fern Farms took advantage of the price rise to cash in the shares they’d got in part settlement after PGW’s offer to take a 50% share in the meat company fell through.
I think that’s a wise move because as a newsletter from our sharebroker said: . . . any targeted upside from the strategic partnership is mostly aspirational and long term at this point . . .
Agria might be part of the answer to PGW’s problems but a need for investors isn’t the company’s only worry.
Its attempt to buy in to SFF was seen by many as a ticket-clipping exercise, not unlike its involvement with Farming Systems Uruguay.
Farmers unhappy about these moves have taken their business elsewhere and the company has lost some of its good stock agents too.
It’s got a lot of ground to recover in the field and its new partner won’t be able to help with that.
