A. And B. Reply On Counter Bid

Press, Volume CIV, Issue 30811, 24 July 1965, Page 22

A. And B. Reply On Counter Bid

Comments in explanation of several statements attributed to R. A. Brierley Investments in its counter-bid for John Chambers were made yesterday by the chairman of directors of Andrews and Beaven (Mr R. C. Neville).

“John Chambers and Son shareholders are most unlikely to be involved in any loss of dividend income," said Mr Neville. “For the year ended June 30, 1964, Chambers tax-paid profit was just sufficient to pay a 7 per cent ordinary dividend.

“The combined tax paid profits of Andrews and Beaven and John Chambers and Son for the same period would have been sufficient to pay 9 per cent on the combined ordinary capital after the merger and 51 per cent on the combined preference capital and still leave a net surplus of £39,085 from the year’s operations. “One hundred Chamber’s shares at 7 per cent equals £7 dividend. By the terms of the merger these would be replaced by 80 Andrews and Beaven shares at (say) 9 per cent which equals £7 4s dividend.

“The greater strength of the combined companies will create an organisation with unrivalled prospects for trading and manufacturing growth,” said Mr Neville. “It appears that Brierley’s offer of 45s per share includes the payment to Brierley of the accrued dividend on Chamber’s shares. “Payment is to be made over a period of 12 months by quarterly instalments. “1 calculate the cash value of Brierley’s offer to Chambers shareholders as: 45s —less accrued dividend at 7 per cent retained by Brierley (Is 4.8 d) 43s 7.2 d. Less interest on unpaid purchase money at 6 per cent (Is 6d) which leaves 42s 1.2 d. ' Brierley Holdings “Brierley claimed to hold 13.5 per cent of the 445,000 £1 ordinary shares but my calculation is that the 33,231 shares held by him represent 7.46 per cent of the 445,000 shares. “Brierley’s offer for at least 180,000 ordinary shares

is insufficient to qualify for the minimum requirements scheme. “Fifty per cent of the ordinary capital plus one share less his holding of 33,231 shares is 189,270. His bid for 180,000 is deficient by 9270 shares. “If preference capital is included (and under certain circumstances the holders of preference shares are entitled to vote at general meetings of Chambers), the deficiency in the bid would be 36,770 shares,” said Mr Neville.