Shares in PGG Wrightson soared 17% even as the rural services group urged investors to hold off accepting a tender offer from China's Agria Corporation until the deal had been more fully evaluated.

The New Zealand group said that it had hired Grant Samuel & Associates to prepare an independent appraisal of the Agria offer which, priced at NZ$0.60 a share, offers Wrightson shareholders a 25% premium to the closing price of the stock as of Thursday's close.

"The directors recommend that shareholders await receipt of the target company statement before making any decision regarding the offer," the company said.

Nonetheless, the shares jumped NZ$0.08 to close at NZ$0.56 on Friday as investors applauded an opportunity to cash in their underperforming stock.

Restructuring plans

Agria, which is already Wrightson's largest shareholder, has joined with grains-to-chemicals conglomerate New Hope, China's largest feed company, to launch a tender for 235m further shares, sufficient to lift its stake from 19% to just over 50%.

The move follows a period of poor performance at Wrightson, a New Zealand farming icon which, with a relatively high debt burden, suffered particularly from the credit crunch, and also suffered from hiccups at a dairy joint venture in Uruguay.

Xie Tao, the Agria chief executive and a Wrightson board member, said on Thursday that the New Zealand group, which warned on profits last week, had "underperformed expectations in recent times" and required "restructuring and a refocus on the core businesses of AgriServices and AgriTech".

Tie-up trends

The move comes amid a spate of bids, with mixed success, by Chinese bidders for assets in the broader raw materials sector. Israel's MA Industries, the world's top manufacturer of generic agrichemicals, is a target for ChemChina.

The Agria deal is also dependent on approval from New Zealand's Overseas Investment Office, which this week won government backing to veto a controversial NZ$200m offer from a Hong Kong-listed bidder for a large dairy estate.

Furthermore, Canada's Agrium has stoked consolidation in the rural services sector by buying Australia's AWB for the Landmark farm retail business, announcing last week that it is to sell the core grain handling operations to Cargill.

New boss 

Wrightson also unveiled the appointment of a new chief executive, George Gould, to succeed Tim Miles, who quit in October.

Sir John Anderson, the Wrightson chairman, said that Mr Gould, who will take office in February, was "a highly capable leader", and highlighted the new chief executive's "strong change management skills".

The appointment will mean Mr Gould resigning from the board of finance group Pyne Gould Corporation, Wrighton's second-biggest investor, which has already committed to accept the Agria offer with its 18.3% stake.