Green Party economic spokesperson Russell Norman was way off the mark when he said that the takeover offer for Turners & Growers was not in New Zealand’s national interest.

Norman told Morning Report today; “The question is whether the Overseas Investment Office will decide that this is in New Zealand’s national interest and it’s hard to see how having this large value chain, which is quite important in New Zealand, in overseas ownership is going to be good for us.”

Norman is wrong for a number of reasons including;

–    Guinness Peat Group, which is a UK company, has agreed to sell its 63.46% Turners & Growers shareholding to German group BayWa Aktiengesellschaft for $1.85 a share. This is a transaction between two European companies which doesn’t have any impact on the foreign ownership of Turners & Growers

–    BayWa is required to make a takeover offer to all shareholders as part of this deal but there is no requirement for any other shareholders to accept.

The most likely outcome is that few, if any, of the non-Guinness Peat Group shareholders will accept because the $1.85 offer price is well below the company’s net tangible assets of $2.47 a share and BayWa, which has a huge exposure to the agriculture sector, should be a far better controlling shareholder than Guinness Peat Group.

The most likely outcome is that Turners & Growers will remain listed on the NZX and, hopefully, perform much better than it has in the past.

Brian Gaynor