PGG Wrightson, which is selling its dominant seed and grain business, posted record full-year earnings but lowered its final dividend payment to shareholders, saying it was eyeing reinvestment opportunities.
Shares in PGG Wrightson jumped as much as 9.4 percent after the country's largest rural services business said it had agreed to sell its seed and grain business to Danish cooperative DLF Seeds for $421 million in cash and $18 of debt repayment, and signalled it may return up to $292 million to its shareholders.
PGG Wrightson said full-year profit was less than half of last year's as the rural services firm faces backdated holiday pay obligations to its staff, higher costs, and an absence of property gains.
PGG Wrightson says it has no comment on Australian media reporting that ASX-listed agribusiness company Elders is looking to buy it for $600 million.
The government's directive to the Overseas Investment Office to raise the bar in overseas applications to buy sensitive New Zealand land has scared away tens of millions of dollars in investments in rural property and will hurt farm values, real estate firms say. Jonathan Underhill from BusinessDesk reports
PGG Wrightson reaffirmed its forecast for annual earnings, saying weaker performance from its Australian and South American businesses would be offset by better trading in New Zealand.