Hellaby sells its stake in wool trader to Hubbard

By Chris Hutching

Friday 2nd November 2001

Allan Hubbard

Timaru agribusiness millionaire Allan Hubbard has taken control of the 39% stake of New Zealand Wool Services International formerly owned by Hellaby Holdings for 37c a share.

Hellabys bought into WSI about four years ago for 25c a share and during that time has received annual dividends of 1c in the first two years and 2c for the past two reporting periods. The 37c a share equates to $10 million for Hellaby but it will retain a 20% interest in WSI's wool scour business.

Grower shareholders who hold about 30% of the WSI shares will have to give their approval because the deal requires them to ratify an application for exemption from the new Takeovers Code.

But their attitude is likely to be positive judging by comments from WSI chairman Pat Morrison, who welcomed Mr Hubbard onto the share register.

Mr Hubbard, who runs an accounting and finance business in Timaru, is considered a strong supporter of the farming scene, particularly in South Canterbury where he has been involved in a huge range of activities including backing the Opuha Dam and assisting individual farmers onto properties to the benefit of all parties.

WSI's wool marketing activities were formerly carried out by the Wool Board until the company was set up in its own right in 1995. As with many other corporatised co-operatives the main beneficiaries - farmers - proved unwilling to put more capital into the company and Hellaby shareholding grew in response to WSI's capital needs on a couple of occasions.

Mr Hubbard with his other diverse and strategic rural interests makes for a more logical owner.

WSI trades mainly in cross-bred wool and has been affected by a recent downturn in prices in the order 10-15% but chief executive Michael Dwyer said there were signs of recovery in Australia where market prices were mainly set.

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