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Richmond plotters hoist with their own petard

By Chris Hutching

Friday 14th March 2003

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More accusations of deceit and betrayal emerged in the seemingly endless takeover struggle by South Island meat co-operative PPCS of its northern quarry, listed Richmond.

On Wednesday the minority Richmond shareholders, who have obstructed PPCS at every possible turn, were dismayed to discover that the shares they sold recently to Hawke's Bay businessman Graeme Lowe had ended up with PPCS, taking its total holding to 64%.

Richmond minority holders, including former Richmond chief executive John Foster and shareholder Tom Cross, sold out to Mr Lowe a few weeks ago in the belief they were helping form a power bloc to ward off PPCS.

But Mr Lowe's overriding concern was to protect the supply contracts his own companies have with Richmond and, recognising the likely outcome, he has reached an agreement with PPCS assuring those contracts and receiving an undertaking that he is a likely candidate for a directorship once PPCS has full control.

He sold his 8% stake at the raised PPCS offer price of $3.11 (up from $3.05). The bid is now unconditional, meaning that sellers will receive a cheque for their shares immediately, rather than having to wait until a particular threshold is reached.

But the final outcome is far from over, PPCS chief operating officer Keith Cooper acknowledged yesterday. Although PPCS has 64% or 26 million shares, a court order requires forfeiture of 6.8 million shares and another 14 million will lose their voting rights (the court-ordered punishment for various breaches of securities legislation by PPCS during its earlier takeover attempts).

The High Court has given PPCS leave to seek further directions and challenge the earlier orders depending on the outcome of events that might have been unforeseeable. At this stage it looks as if PPCS needs to acquire another five million or so shares to attain control. The unexpected events this week brought home the futility of the Richmond parties thinking they could control share ownership of the company after they lost the battle five years ago.

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