PGC investors may get more Heartland shares

Pyne Gould Corporation shareholders may be offered more shares in Heartland (formerly Building Society Holdings BSH) as the company looks to divest its remaining stake in PGG Wrightson.

Christchurch-based PGC is already seeking shareholder approval to distribute its 72% stake in Heartland – formed through the merger of Southern Cross and Canterbury Building Societies and PGC's Marac Finance.

PGC had also agreed to sell its 18.3% stake in PGG Wrightson into Agria Corporation’s 60c-a-share partial takeover offer but was left with 8.7% following scaling of acceptances.

PGC will use some of the proceeds to pay back a $27 million loan note to Marac and says it will also look to exit its remaining PGW shareholding.

“The board is of the view that the proceeds from the Agria offer (after meeting or providing for commitments), together with any remaining PGW shares, are surplus to core business requirements going forward,” PGC said in its notice of meeting and information memorandum lodged with the stock exchange.

“The PGC board is therefore considering returning surplus cash and PGW shares to PGC shareholders and/or applying those assets to acquire additional shares in BSH and returning those BSH shares to PGC shareholders.”

The meeting is to be held on May 18.

Under the distribution proposal, 216.6 million BSH shares will be distributed pro rata amongst PGC shareholders, with each Pyne Gould shareholder to receive about 268 BSH shares for every 1000 Pyne Gould shares.

At the same time, about 73.2 percent of the Pyne Gould shares held by each Pyne Gould shareholder will be cancelled.

Following the distribution and cancellation, a Pyne Gould shareholder will hold about 268 BSH shares and 268 Pyne Gould shares for every 1000 Pyne Gould shares held beforehand.

PGC will be left with assets of $195 million, according to the company.

These include wealth manager Perpetual Group, distressed asset manager Torchlight Investment Group, and a property group that includes Marac's impaired property assets.

The company expects to drop out of the NZX-50 index given its much smaller size.

PGC shares remained untraded at 31c this morning.

Heartland shares gained 4c to 76c, closing the gap on the company’s net asset backing of 82c.