Some Cash Sought In Kaiapoi Offer

Press, Volume CII, Issue 30041, 28 January 1963, Page 10

Some Cash Sought In Kaiapoi Offer

(New Zealand Press Association)

WELLINGTON, October 27.

“The weakness of the position in which the directors of the Wellington Woollen Manufacturing Company, Ltd., find themselves is exposed when the chairman, Mr W. S. Wheeler, says that directors of the Kaiapoi Woollen Manufacturing Company, Ltd., were fully informed of the actual value of the Wellington assets,” said Mr J. Willis today.

Mr Willis, a shareholder in the Wellington company, is opposing the proposed merger with Kaiapoi.

“Wellington shareholders would like to know when the new valuations were made, and why they were not informed of the correct shareholders’ funds before the directors recommended the merger,” he said. “My statement that Wellington assets may well be as high as £1.200.000 after revaluation has not been denied, and shows that Wellington will be contributing considerably more than approximately 50 per cent, of the total assets.

“Only a year ago, Kaiapoi shares were down to 6s 6d, and there is no guarantee that they will not fall heavily after the merger when selling takes place. “I. for one, am not happy to have Kaiapoi scrip as payment for my shares, and consider some cash should have been part of the deal as insurance against this fall. The cash'would be easily totind by the sale of some of the Wellington company’s properties. "Woollen manufacture in this country is becoming Increasingly competitive, and there is little in the past performance of either of the companies to give one much confidence thet, even in their combined state, they can successfully meet this competition and maintain the 10 per

cent, dividend on which the Kaiapoi share price is based. “Wellington Woollen, on liquidation, would realise an upset price of not less than 50s a share, leaving the shareholder with cash to invest as and where he lakes. “The thinness of the Kaiapoi offer, in its present form, is apparent. and it should be rejected by Wellington shareholders.” (Other references Page 14)