Chevron Sale Bid Questioned

Press, Volume CVI, Issue 31154, 2 September 1966, Page 15

Chevron Sale Bid Questioned

<N.Z. Press Association —Copyright <

SYDNEY’, August 31.

A letter from a firm of Sydney stockbrokers to the receiver for Chevron Sydney, Ltd.. Mr B. H. Smith, has questioned whether the best bid for the Chevron Hotel had been accepted.

The text of this letter and another sent to Mr Smith on August 25 were released yesterday by the stockbrokers, Ralph W. King and Yuill. They revealed for the first time that a bid for 3.2 m dollars in cash and additional payment for stock had been made by R W. Miller and Company. Pty., for the hotel on August 19. The stockbrokers. Ralph W. King and Yuill, have been acting on behalf of R. W. Miller and Company, Pty. Mr Smith and the manager of T. and G. Nominees. Pty., trustees for the debenture holders. Mr K. D. J. Coventry. announced the sale to Whitehouse Properties in a joint statement through the Sydney Stock Exchange on Friday. The hotel was sold for 3.6 m dollars on a walk-in, walk-out basis.

The statement said the contracts provided for possession to be given on October 31 on payment of 500,000 dollars, and for payment of another 500,000 dollars by January 31 next year.

The balance was to be paid by half-yearly instalments ending on January 31, 1974, at an interest rate of 6 per cent a year.

The letters released yesterday said Miller’s offer, made on August 19, was for 3.2 m dollars cash on a walk-in, walk-out basis and payment in

addition for food and beverages in stock at valuation.

(Stock is understood to have been valued at more than 200,000 dollars.)

No affirmative reply had been received so it was assumed they did not wish to sell the hotel at the price offered and the bid was withdrawn.

Yesterday’s letter said, in part: “We fail to see how this (the Whitehouse) bid was in any way a better bid than that of our client. . .. “Surely it would have been in the interest of debentureholders to have recevied cash immediately rather than have to wait for some considerable time to receive their money and also the fact that you are financing Whitehouse Properties at 6 per cent, which is well below the going interest rate. “As the payments extend to 1974, the liquidation costs will be substantially higher, which all means debentureholders are far worse off in your having accepted this bid than that submitted by our client.” On August 10, R. W. Miller (Holdings) said it had made an unconditional offer of 3.2 m dollars for the hotel. The offer comprised 1.2 m dollars in cash and Im shares in Miller Holdings, which the company considered to be worth 2m dollars. On August 12 it was announced that negotiations had fallen through.