PPCS renews its raid on Richmond

Friday 18th May 2001

By Nick Stride

South Island meat processor PPCS could gain a swift knockout in its renewed assault on Hawke's Bay's Richmond.

PPCS yesterday announced it had bought the 10% Richmond stake held by director Peter Spencer. Adding the 1.3% it already held took it to 11.3% and it sought a further 1.4 million shares on market at $3 a share to take it to 15%.

PPCS chief executive Stewart Barnett said the board had no plans beyond that and had given approval only for a stake of 15-16%.

Control of Richmond hangs on the key 36% stake owned by Hawke's Bay Meats, a subsidiary of former Brierley Investments executives Paul Collins and Bruce Hancox, and Patsy Reddy's Active Equities.

All three have seats on Richmond's eight-strong board.

HBM came by its shares during PPCS' previous attempt to take over Richmond early last year.

Richmond's independent directors then ruled PPCS breached the company's constitution when it acquired an interest in shares held by Maori investor HKM Nominees, and in subsequent on-market buying.

They ruled PPCS' 36% holding must be sold. HBM bought it with PPCS vendor finance, paying $28 million.

A sale to PPCS at $3 would net HBM a swift $16.3 million profit. It would take PPCS to a controlling 51%.

Richmond listed on the Stock Exchange in February.

Mr Barnett said PPCS' timing was unrelated to the impending enactment, on July 1, of the Takeovers Code.

However, if PPCS buys HBM's stake before then it will be able to pay a premium without offering the same price to all other shareholders.

Another Active Equities investment, Wellington-based mobile radio company TeamTalk, this week finally pulled off a deal to buy Telecom's mobile radio business. The Commerce Commission gave clearance for the transaction a year ago.
The sale includes Fleetlink - trunked mobile radio network - as well as products used by emergency services.

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