PPCS picks up the prize - for a price

Friday 15th June 2001

By Chris Hutching

A five-year takeover battle this week finally gave South Island meat processor PPCS what it wanted - a controlling stake in Richmond.

But if there was a smile on PPCS chief executive Stewart Barnett's lips he was not making it too obvious.

The struggle came at a cost - $3.65 a share compared with recent market prices at around $3. Yesterday prices fell to $2.65 in the aftermath of the takeover battle.

Mr Barnett said PPCS was treated harshly last year when the company was forced to sell its Richmond shares it had bought after Richmond directors ruled the shares had been acquired in a way that infringed the company's constitution.

This week, Richmond chairman Sam Robinson agreed to put the past behind him and work with PPCS.

The deal consummated a few days ago involves PPCS buying 49% of Hawkes Bay Meat Ltd, which owns 14.66 million or 36% of Richmond shares.

The other owner of Hawkes Bay Meat is Active Equities, a company associated with former Brierley executives Paul Collins and Bruce Hancox, who say they intend to remain shareholders at least until February 2003. At that time they have granted an option to PPCS to buy the balance of the stake at the higher of 95% of the market price and $3.50 a share.

This arrangement raises the prospect of compliance with the new Takeovers Code but Mr Barnett said yesterday PPCS lawyers had explored all the avenues and the deal complied.

Either way, the move gives PPCS a stronghold over all-year-round meat supplies and valuable overseas marketing links. Ironically, PPCS is an Otago-based co-operative, which will now benefit from the dividends paid by Richmond.

PPCS took care to head off concerns about market dominance concerns by selling the venison business it bought a month ago.

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