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Minorities bring PPCS 'to account'

By Chris Hutching

Friday 31st January 2003

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A hearing before the Takeovers Panel yesterday marked the latest step in one of the meat industry's longest running tussles for control over the five years since Richmond's Stock Exchange listing.

During that time a small group of Richmond shareholders, with a stake of just over 1%, have waged a guerrilla war, exploiting every legal opportunity to stave off major shareholder, Invercargill-based farmer-owned co-operative PPCS.

The next move in the tortuous takeover battle hinges on the Takeovers Panel, which yesterday heard the minority shareholders argue that southern share raider PPCS should obtain 90% acceptances rather than be permitted a partial takeover (PPCS has about 42%). A ruling is expected in a few days.

The leader of the Richmond group, Napier lawyer Robin Bell, insisted yesterday he has only ever been concerned about PPCS following the rules in its takeover attempts. He credits his group, through its litigation, with forcing PPCS to make the formal takeover bid mailed to shareholders last week at $3.05 a share, an offer the majority of Richmond directors recommended shareholders accept.

The recommendation indicates disgruntled shareholders are increasingly marginalised even though they include board chairman Sam Robinson, who says he won't be selling his shares.

According to Mr Bell, his group has "empowered" other shareholders by bringing PPCS to account over the way the southern raider tried to hide its identity by using nominee companies to buy Richmond shares and other breaches of Securities legislation. As well as litigating against PPCS, some Richmond shareholders in the group have also sold shares to Lowe Corporation (now with a 10% stake) and UK-owned North Meats (with 4.3%), forming two potential blocking factions on the share register and potentially increasing the cost of the takeover to PPCS.

Appealing to interests of farmers and shareholders is also the theme of PPCS chief executive Stewart Barnett who, in a letter to Richmond suppliers, says PPCS will benefit from Richmond's all-year-round stock supply.

The $3.05 offer stands at a 73% premium above average weighted prices paid during the three months to November 20 and a 35% premium for average weighted prices in the three months to December 20. An independent appraisal report values the shares at between $3 to $3.67.

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