Wellington, Aug 16 NZPA - NZ Farming Systems Uruguay Ltd (NZFSU), a dairy farm developer in South America, is now the subject of competing bids.

Uruguayan-based Union Agriculture Group Corp today notified of its intention to make a cash offer at 60 cents per share for all of NZFSU. This topped the existing offer of 55 cents a share from Singapore-based Olam International.

The company's share price rose 3.45 percent to 60 cents on news of the competing offer.

UAG is a privately held company formed to acquire and develop agriculture land in Uruguay and one of Uruguay's largest agricultural businesses.

The UAG offer is for 100 percent of the company but conditional on UAG achieving a minimum 50.1 percent shareholding and gaining Overseas Investment Office approval.

"We are content to achieve ownership of 50.1 percent and have NZFSU remain listed on the NZX," said UAG chairman Juan Sartori.

"We believe combining UAG's management expertise and local knowledge in Uruguay with NZFSU's expertise and experience in dairy farming will create significant opportunities for growth. NZFSU could become one of the most successful dairy operations in the world."

UAG said its offer was a 46 percent premium to the trading price of 41 cents a share on July 17.

UAG said it has funding from existing cash on hand and from various other sources it did not detail. It expected to dispatch the final offer document within 14 days.

UAG has retained Minter Ellison Rudd Watts lawyers in Auckland and BMO Capital Markets to act as its legal and financial advisors in connection with the transaction.

Shares of NZFSU surged when Olam announced its takeover plans last month, pushing the share price to its highest level in more than a year.

Olam entered into an agreement to purchase PGG Wrightson's 11.5 percent stake in NZFSU subject to regulatory approval. Olam's offer valued the target at $134 million.

Olam has a 29.97 percent shareholding according to a notice filed to NZX on Friday. The notice said Olam had received PGG Wrightson's acceptance of its offer.

NZFSU's board reiterated its earlier advice that shareholders should not sell their shares when the Olam offer was sent to shareholders.