Singapore company Olam International has placed a takeover bid with PGG Wrightson for New Zealand Farming Systems Uruguay (NZS).

Olam already has an 18% stake in the company, and will pay 55c each for 28.1 million shares from PGG.

Spokesman Brent Melville says PGG remains committed to its core seeds and rural services businesses in Uruguay, but the sale is in the best interests of shareholders.

“We are selling this particular part of our business because we believe having certainty of funding to complete NZS’s development plans represents the right thing for our shareholders and the right thing for PGG Wrightson.

"Our other business in Uruguay, our seeds business, is not affected. We are fully committed to growing in South America, we have an extensive seeds and rural business supporting a number of rural customers in Uruguay.”

Trading on Farming Systems shares jumped from 41 cents to 53 on Monday on news of the takeover.