Richmond share battle lines up farmers

By Chris Hutching

Friday 28th April 2000

A company formed by Hawke's Bay farmers to stymie a takeover of meat processor Richmond says it now has 10% support and is confident it can rely on many more proxy votes from like-minded supplier shareholders.

According to Tom Cross, a director of the Hawkes Bay farmer-owned company called Richold, the battle will determine who controls the schedules and dividends paid by Richmond.

Dunedin-based meat cooperative PPCS launched a bid for control of listed Richmond late last year and has reached nearly 30% via nominee HKM. With the support of the 10% stakeholder Toocooya Nominees, associated with Peter Spencer, PPCS chairman Jim Pringle was appointed to the board and they supported Bob Croker as chairman.

But Mr Cross said Richold was now becoming a force to be reckoned with. Its 15-20% target looked more realistic with Richold's 1:1 offer to Richmond farmer shareholders set to run until May 22, he said.

The farmer suppliers are also confident of the support of about 10% of votes controlled by Richmond staff.

"One of our first objectives would be to appoint a majority of directors on the board. There's a bit of play to run out yet before we sit down at the table and resolve this sniping. We need to be more cooperative," Mr Cross said.

Richold is also taking credit for increasing shareholder wealth with its market play. The Richmond share price has risen about 25c and has been trading between $1.45 and $1.55. Ironically this may have encouraged some hard-up farmers to sell shares.

PPCS chief executive Stuart Barnett said his board was seeking greater influence on the Richmond board. It was arguable what level of shareholding would achieve effective control but the PPCS board would like to get to 33%.

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