Uruguay-based Union Agriculture Group (UAG) has pulled out of its planned takeover bid for New Zealand Farming Systems Uruguay.

UAG and Singapore-based Olam had exchanged competing bids for a majority stake in NZFSU, which rejected Olam’s initial 55c a share offer as too low.

After UAG’s offer of 60c a share Olam then upped its offer to 70c a share and UAG, which intended to launch its formal offer early next week, decided against making a bid above the current Olam offer.

“We are a conservative company and we currently have other opportunities where we can apply our funds and resources in Uruguay at better terms,” UAG chairman Juan Sartori said.

“While we believe NZFSU was potentially very good for UAG and that we could make it a successful operation, the opportunity does not look so good for us at that price.”

Mr Sartori said UAG remained interested in working with NZFSU in Uruguay or with Olam, depending on the outcome of the Olam bid, and was happy to explore other opportunities for cooperation.

NZFSU is also in talks with a third party.