Enza share offer recommended

By Phil Boeyen, ShareChat Business News Editor

Monday 8th April 2002

Enza (EZA) shareholders are being advised to accept Guinness Peat Group's (NZSE: GPG) offer of $1.20 per share for the company.

Chairman of the independent directors, Brian D'Ath, says after carefully considering the information in the Ferrier Hodgson report into the offer, the directors agree that the GPG offer is fair and within the report's range of share values.

The report has put a value of between $1.17 and $1.53 on the company's shares, which means the offer by GPG Orchards is at the lower end of the valuation.

"GPG has a conditional acceptance for 19.9% of the shares, which with their existing holding gives them 39.8% of the company," the report says.

"If they acquire a further 10.3% they will have a secured effective control of the company. Given their position, and that the offer price is within our valuation range, we consider the offer is fair."

GPG has already entered into a conditional contract to buy FR Partners' 19.9% stake for $1.20 per share and the report notes that "given FR Partners' knowledge of Enza, we can only assume that they consider this to be a fair price based on their investment criteria, their commitment of resources to Enza and their alternative investment opportunities."

GPG's offer closes on May 6. Enza MD, Michael Dossor, says that during the offer period it was still business as usual for the company.

"We are looking forward to welcoming a long-term cornerstone shareholder to our business, and the stability that it will bring. Meanwhile, we are concentrating on working with our supply base, and the marketing of our product offshore."

According to financial budgets in the report Enza is forecasting a profit of $4.18 million for the year ended September 2002 on net operating revenue of $472.5 million. The company booked a $20.4 million loss last year and a $37.8 million deficit in 2000.

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