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Hart takeover gets Goodman family blessing

By Nick Stride

Friday 1st August 2003

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In a show of support of symbolic significance to entrepreneur Graeme Hart, the Goodman family has bought back into the company it founded in the 1980s.

Since Mr Hart's Burns Philp created Australasia's largest food group with the $2.7 billion Goodman Fielder takeover the family has built up a stake of about 1%, worth $16 million at the current share price.

While only a small part of the family's estimated $550 million fortune, Patrick Goodman, son of Goodman Fielder co-founder Sir Patrick, said the holding was a vote of confidence in the man he has met only briefly.

"We understand the industry and that's why we decided to buy a few shares," Mr Goodman told The National Business Review.

The Goodmans had no shareholding or board influence since Sir Patrick stepped down as a director in 1993. The family viewed the company's subsequent floundering with "disappointment," his son said.

"We would have done things differently."

Mr Goodman said how Mr Hart addressed Burns Philp's high gearing in the wake of the Goodman Fielder takeover was "the key to the whole thing," but pointed out Mr Hart would not have been able to secure that level of debt funding for the deal if he had not been able to show strong and stable cash flows.

The quality of Burns Philp's senior management also attracted the family. Mr Hart had moved decisively to cut middle-management and head office costs and to close down uneconomic bakeries ­ issues the previous board and management had failed to address.

That meant laying people off, Mr Goodman said, "something no one likes to do."

He met the extraordinarily busy Mr Hart for the first time last week at Burns Philp's shareholders' meeting but gleaned no details of Hart's longer-term intentions for the company. "I muscled in and managed to talk to him for a couple of minutes. But we have no knowledge of what he's up to."

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