A $220 million injection of cash makes it easy to understand why overtures from PGG Wrightson might be attractive to Silver Fern Farms.
It’s more difficult to understand why PGW wants to get into the meat industry. However, Alliance Group chief executive Grant Cuff gave his views on this in yesterday’s Southland Times (which is no longer on line):
Mr Cuff believed PGG Wrightson was trying to protect its own base and take multiple fees and that any remaining profits would be split between PGG Wrightson and the farmer.
SFF seem to think that PGW’s involvement would increase the prospects of a merger with Alliance but this comment suggests the reverse is true.
If the body language at the “fireside chats” SFF is holding is anything to go by, its shareholders aren’t keen on PGW’s involvement either.
The meeting in our area was like a gathering of the Glums. There were about 20 farmers there and around half of them have now converted to dairying or cropping so while they may still be SFF shareholders they are no longer involved in the meat industry.
The crossed arms and unhappy faces of those who still have sheep suggested they weren’t convinced of the merits of PGW’s proposal either.