Agria's 60c-a-share offer fell within the 53c to 65c valuation calculated by adviser Grant Samuel and Associates, and represented an 18.3% premium over the volume-weighted average share price for the 30 days prior to Agria's offer being made.
However, Grant Samuel said the 60c price reflected PGG Wrightson's (PGGW's) poor earnings performance.
Agria is seeking to take its shareholding from 19.01% to 50.01% and while it has Pyne Gould Corporation's 18.3% share, the situation was complicated on Friday when a new suitor was allowed access to do due diligence with the option of launching a takeover.
That company is believed to be Canadian-owned Australian company Landmark Rural Holdings.
In its report to shareholders, Grant Samuel said PGGW's share price had reached a historic low when Agria made its offer "and, on the surface, may appear opportunistic".
Grant Samuel was critical of Agria for the lack of clarity about its intentions for PGGW, saying this was an "unsatisfactory" situation for minority shareholders who, because it was a partial takeover, would retain a shareholding and retain a vested interest in Agria's plans.
While Agria's directors had said they were supportive of a review of PGGW's divesting its finance arm, there was no evidence Agria's presence had had a material effect on PGGW's performance.
Agria, a Chinese seed business with interests in operational management and acquiring proprietary technologies, has a market capitalisation of approximately $160 million and net assets per share of about $2.70, while PGGW has a market capitalisation of $410 million.
New Hope Group, one of China's first private companies, is now among China's largest agricultural and food companies, employing 60,000 staff and generating revenue in 2009 of $9 billion.
It will contribute 10% of the PGGW purchase price and is expected to have a limited role, unlike Agria which is expected to leverage PGGW's seed technology and livestock expertise in China.
PGGW's committee of independent directors said the company's underlying trading performance was expected to improve due to favourable commodity prices flowing through to rural property values, and as the sector debt burden eases.
"There is a case for concluding that while the offer may have merit for shareholders with a near-term investment focus or who value near-term certainty, shareholders with longer-term investment horizons may well conclude that the offer undervalues PGGW's long-term prospects.
PGG Wrightson interest
• Agria (Singapore) PTE owns 19.01% of PGGW and, with New Hope Group, wants to increase that stake to 50.01%. It has secured Pyne Gould Corporation's 18.3% stake, which is conditional on reaching its target.It is offering 60c a share. In the past year PGGW has traded between 43c and 67c.
• On Friday, a surprise takeover bid was lodged for PGGW, believed to be by Canadian-owned Australian company Landmark Rural Holdings. The bidder is conducting due diligence and has asked for its identity to be kept confidential.
