Rural Portfolio Investments Limited Announces Intention To Make $1.50 Per Share Offer For Wrightson
Rural Portfolio Investments has today announced that it intends to make an offer to purchase shares in Wrightson Limited
by means of a partial takeover offer pursuant to the Takeovers Code. The offer will be for sufficient shares to take
Rural Portfolio Investments’ control of voting rights in Wrightson to 50.01 percent.
Rural Portfolio Investments currently has a shareholding of approximately 13 percent in Wrightson, acquired through
purchases on the New Zealand sharemarket between September and December 2003. It intends that the partial takeover offer
will be at $1.50 per share, and will include three payment options to suit individual shareholder needs: Cash Redeemable
preference shares in Rural Portfolio Investments Securities Limited (RPI Securities), the financing subsidiary of the
Rural Portfolio Investments group (see section below) A mix of cash and redeemable preference shares
The Managing Director of Rural Portfolio Investments, Mr Craig Norgate, said the offer, when made, would provide
shareholders with an opportunity to realise a price considerably higher than recent market prices for Wrightson shares –
and, if they wished to do so, to switch from their exposure to the Wrightson share price into a fixed-rate investment
with an attractive return and other enhanced features.
Mr Norgate said Rural Portfolio Investments’ intended offer for Wrightson shares was in line with its objective of
investing in the future of the rural sector in New Zealand.
He said the pricing reflected the desire of Rural Portfolio Investments to achieve a majority interest in Wrightson in
order to play its part in the future of the company. “At $1.50 per share, the offer will be very fully priced, whether
measured in terms of prior market prices, earnings per share multiples or dividend yield,” he said. At this price, the
offer will be: 21 percent higher than the market price at the close of trading on the NZX yesterday – ie. before the
announcement of the intended offer – ($1.24) 24 percent higher than the volume-weighted average market price since 24
February 2004 – the day Wrightson’s trading results for the six months to 31 December 2003 were announced – ($1.21)
Mr Norgate noted that, under the Takeovers Code, shares could be purchased by Rural Portfolio Investments via the offer
only if it received acceptances sufficient to take it to 50.01 percent. If Rural Portfolio Investments was not
successful in reaching this target it would review its existing shareholding in Wrightson with a view to exiting. …/2
He also noted that the Code prohibited an offeror from purchasing shares in the target company on-market during the
course of a partial offer. This meant that those who wished to sell Wrightson shares to Rural Portfolio Investments
could do so only by accepting the offer once made.
Intended offer of Redeemable Preference Shares
Part of the funding for the partial takeover offer will be in the form of a public offer by RPI Securities of $85
million in redeemable preference shares (with the right to accept over-subscriptions up to a further $15 million). The
issue is intended to be underwritten to $85 million.
The redeemable preference shares will be in two series: Three-year – with an effective rate of return of 9% pa Five-year
– with an effective rate of return of 10.5% pa
The above rates of return may be adjusted to market. In each case the effective rate of return is based on the intention
to pay a fully imputed dividend.
The redeemable preference shares will also carry a redemption premium based on specified appreciation in the Wrightson
share price.
In addition to the option of exchanging some or all of their Wrightson shares for redeemable preference shares under the
partial takeover offer, Wrightson shareholders will be able to apply for additional redeemable preference shares under
the public offering.
Mr Norgate noted that there are constraints in providing information about this intended offer due to securities law,
which must be observed.
Timing
Mr Norgate said the Board of Rural Portfolio Investments had resolved to make the conditional partial takeover offer and
the offer of redeemable preference shares, and was announcing its intentions publicly in order to keep the market
informed. However, formal notice of the partial takeover offer would not be made until: a combined Prospectus and
Investment Statement for the issue of redeemable preference shares had been registered and was available to Wrightson
shareholders along with the Partial Takeover Offer document, and finalisation of exemptions and waivers sought from the
Securities Commission, the Takeovers Panel and the NZX had been obtained to the satisfaction of Rural Portfolio
Investments.
A draft combined Prospectus and Investment Statement for the redeemable preference shares issue has been lodged with the
Companies Office for its review for registration and with the NZX. It is anticipated that the formal offer documents for
both offers will be ready in mid-to-late April, and that the Prospectus and Investment Statement for the issue of
redeemable preference shares will be available to the public at the same time.
Further details of both intended offers will be released when the formal offer documents are available in accordance
with the Takeovers Code and securities law.