SFF boss smart in getting PGG to help pay for Rissington...

It's just a little too much of a co-incidence...Keith Cooper and Silver Fern Farms takes PGG Wrightson to the cleaners after Norgate reneged on a merger deal but says the livestock company are still the preferred option for an integrated supply chain partnership option.

Now SFF has cosied up to Rissington in a new deal by merging livestock and marketing staff from the North Island genetics company into SFF, to provide advice and knowledge to lamb suppliers wanting to produce lamb to SFF's contract specifications. In short Rissington will take the place of PGG Wrightson.

The two companies have had a working relationship for several years, with SFF processing lambs for Rissington Marks and Spencer contracts so you have to wonder if SFF was really interested in seeing through a deal with PGG in the first place.

And the $25 million pay-out settlement from PGG would come as a handy deposit on the new acquisition wouldn't it?

As Farmgirl has said before, Keith Cooper is one of the shrewdest CEO's in the country. Perhaps the Pork Board should entice him to jump ship...

David and Goliath shall meet

And round three is about to commence now...Keith Cooper is swaggering to the middle of the ring as Craig Norgate adjusts his bloodied mouth gear.

But wait...Norgate's coach is advising him not to yell so much during this round, to keep his cool, to bide his time, to avoid the killer punch.

Already it's been a mighty battle with round one easily going to Norgate, who punched with one hand into Cooper's short pockets and took with the other...but Cooper's mental alertness has given him stamina, he puffed up his chest and delivered an almighty right hook, in the style of Holyfield to nearly knock Norgate out...but Norgate held on, was able to stagger back to his corner to be cleaned up and freshened for the next round.

So, one all at this stage...and now a change in the boxing rules...the two are going to sit down, pat each other's heads, suck their thumbs and let the adjudicator do the talking. Where will round three go? It's anybody's guess, but Cooper has that competitive gleam in his eyes, his pucker is up, his beef chops look firmer...

Will Cooper's witchhunt be in the best interests of NZ agriculture?

The Press said it all yesterday with a bold headline proclaiming PGG Wrightson's capital value had halved in just one week as the company's market capitalisation was slashed to $175 million on Friday.
Hindin Greene partner Grant Williamson, of Hamilton, said that investors had lost confidence in the company particularly after the Silver Fern Farms debacle.
Now, as reported on this blog earlier this week, Keith Cooper - CEO of SFF, is determined to go after Norgate for a figure widely rumoured to be around the $140 million mark.
There is no two ways about this, PGG Wrightson is in trouble. It has high debt levels and a big investor (Pyne Gould Corporation with a 21.5% percent share) wanting out. As Williamson suggests in the article, getting new debt is near impossible in the current economic environment.
So, is Keith Cooper's stance in the interests of New Zealand agriculture at this time, and indeed his own shareholders? Many of those shareholders will be PGG clients and none of them will want to see the company go belly up.
PGG Wrightson is an important company and Cooper's desperation to save Silver Fern's and his own bacon could see it pushed to the brink.
Norgate was stupid to go unconditional on the deal with Silver Ferns without funding but is it even stupider to sink his ship when so many farmers could be hurt by those actions? Couldn't a softly softly approach and a little more patience serve both companies interests?
It's a tricky question, and one I suspect Cooper and his men won't give any consideration to.
It would be interesting to hear your views on this...

PGG in major financial trouble?

Business commentator David Hargreaves has written a damming article on PGG over the 50 percent bid for Silver Fern Farms when the company didn't have the finance to back it, and the subsequent financial problems the company has found itself in.

David finishes by stating that Craig Norgate may be getting 'that call' from John Key soon.

The writing, as they say, might be on the wall...

Read the full article here: http://www.stuff.co.nz/4851777a1865.html

Keith Cooper hints at $200 million compensation from PGG

Craig Norgate can consider himself well and truly spanked and sent to the little boys' corner following the rejection of a pithy $10 million compensation offer for the failed partnership deal with Silver Fern Farms.
On the Farming Show yesterday, Silver Fern Farms CEO Keith Cooper hinted that up to $200 million might be more in the ballpark. Of course they won't get anything like that but some commentators believe PGG could be forced to pay well over $100 million.
Cooper said the value of the transaction had been clearly articulated at around $200 million and this was now lost.
"It can't be substituted with a new deal so we have got to come to a consensus as to what those damages are and quite simply they are vastly different to the $10 million dollar offer by PGG."
Norgate is finding out the hard way that Keith Cooper is not a man to be messed with. In a scathing attack on how PGG has conducted itself through the negotiations he said it was 'a little unusual for one of the parties to take negotiations into the media, particularly as they are a publicly listed company with other disclosure requirements.'
Ouch...you could feel the blow landing on Norgate's chin as Cooper's stance caused an immediate decrease in the value of PGG shares and his broad hints at how much the settlement may cost the company will only continue this downward trend.
Norgate is learning fast that playing chicken with the big boys isn't so much fun after all.

To listen to the full fascinating interview with Keith Cooper go to: http://www.farmingshow.com/