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Small shareholder group backs call not to sell - yet


Tuesday 28th January 2003

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A small group of Richmond shareholders is strongly urging others to sit tight and not to sell to South Island-based PPCS.

The move comes at a stage when it seems likely that PPCS will gain total control of the region's largest company.

Now, two weeks after Richmond appeared safe, it seemed that only an alternative bidder or a Takeovers Panel finding that PPCS's offer broke takeover rules could stop control going south.

One possible alternative bidder, the Bernard Matthews subsidiary, North Meats, which bought a 4.3 percent holding in Richmond a fortnight ago, is still considering its position although if it moved it was only likely to lift its shareholding to 19.9 percent. It cannot go beyond that point without making a full bid.

North Meats chairman Norman McRae said it would make no final decisions until after the Takeovers Panel met on Thursday.

Meanwhile, he confirmed North Meats had had talks with Hawke's Bay millionaire Graeme Lowe, who has a 9.96 percent holding in Richmond.

In their open letter to shareholders, the small group, including some past Richhold members headed by Central Hawke's Bay farmer John Aitken, said there was no need for any shareholder to act with undue haste.

The Takeovers Panel had been assured that the earliest PPCS would make its offer unconditional was February 7.

"So, time is on your side. Use this time to see what transpires," Mr Aitken said.

It was a time for shareholders to review all material carefully and if necessary seek independent advice.

He said the PPCS' offer was conditional and was also subject to the outcome of the Takeover Panel findings. If fault was found with PPCS's offer, it might have to start the process again.

There was a possibility of another stand in the market for Richmond shares around the $3 mark. This would mean Richmond sellers would get cash for their shares almost immediately, rather than wait.

Mr Aitken said Ferrier Hodgson, who undertook a merit report on Richmond, noted that the timing was right for such a bid.

The last time he urged shareholders to wait, they virtually doubled their money. On that occasion, he said, when Richhold was formed to fight off a previous PPCS bid, Richmond shares were selling at $1.20. When Richhold wound up, Richmond shares were worth more than $2.

Hastings sharebroker Paul Clothier has also urged shareholders to wait to see if there were further developments.

"If you accept now you cannot retrieve your position if something better comes along."

Richmond chairman Sam Robinson said yesterday he would not accept the offer because "he believes the circumstances which brought about the offer, including litigation and its outcome, raise issues over and above those of pure financial value".

He said many of Richmond's 2200 shareholders were not straight investors but stakeholders who had a passion for the company because it had a good and sound future.

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