Neeco To Meet Shareholders

Press, Volume CVII, Issue 31384, 1 June 1967, Page 16

Neeco To Meet Shareholders

(New Zealand Press Association) DUNEDIN, May 31. Directors and executives on National Electrical and Engineering Company, Ltd., will meet Dunedin shareholders on June 14 to elaborate on a take-over offer from Cable-Price-Downer, Ltd.

The take-over involves an exchange of shares. Cable-Price-Downer, Ltd., offered two C.P.D. 10s shares for five Neeco 5s shares. At latest market prices this puts a value of 6s 34d on each Neeco share.

A director of Neeco (Mr A. C. Stephens) said this morning that some misunderstandings had arisen over the bid, and the meeting’s purpose was to clarify the situation.

The C.P.D. offer was made on April 19, he said, and it would give shareholders an extra dividend in addition to the normal dividend for the [year to March 31. This would come from the [C.P.D. interim dividend in | December which was normally at the rate of 5 per cent. In addition, if C.P.D. maintained its normal dividend of 10 per cent, Neeco shareholders in future years would re-, ceiv'e an increase in dividend of 33 1/3 per cent

The effect of the offer would be to give Neeco shareholders a capital advantage of Is a share, on the basis of market values of the shares at the time of the offer. The main criticism of the offer was based on a comparison of the respective asset values of the shares. On the last balance sheets, this comparison appeared to be disadvantageous to Neeco shareholders, but this had no real bearing on the take-over offer as it involved an exchange of shares and not a cash payment. In any case, comparison of assets on balance sheet figures could be entirely erroneous and misleading, Mr Stephens said.

“I have been authorised by by the chairman of C.P.D. to say that no variation in terms tion in terms of the offer will be made,’’ said the chairman of Neeco (Mr I. M. Matheson) in a circular letter to shareholders yesterday. Mr Matheson says his board feels it is a pity that C.P.D.’s offer, which legally must be a formal take-over bid, should have provoked opposition that is little more than criticism of the board and executives. The board is satisfied that shareholders’ best interests will be served by acceptance of the offer and they urge that acceptances be sent in as early as possible.