COMMERCIAL D.B. Deal Satisfies Tui Notes Trustee

Press, Volume CIX, Issue 31908, 8 February 1969, Page 16

COMMERCIAL D.B. Deal Satisfies Tui Notes Trustee

r.Veio Zealand Press Association)

AUCKLAND, February 7.

The terms of the Dominion Breweries, Ltd, take-over offer for Tui Brewery, Ltd, have been discussed in depth with the noteholders’ trustee, which has agreed that the Tui directors have negotiated the best possible deal for their noteholders.

The chairman of Tui (Mr R. Martin) says this in a letter accompanying the formal take-over documents. His board recommends acceptance of the bid of five Dominion shares for every eight Tui ordinary shares, 10 for eight preference shares and five for nine convertible notes.

This bid, and that of two-for-three for Taranaki Brewery, Ltd, are conditional upon 90 per cent acceptance (or a lesser percentage which may be set by Dominion Breweries) by March 7. There has been some controversy over whether Tui noteholders would get a fair deal, compared to shareholders. The trustee for the notes is the Perpetual Trustees and Agency Company, Ltd. “Tui has made considerable progress in recent years, but it remains a very small unit in an industry requiring high capital investment for further development,” Mr Martin says in his letter. “The merger will give

holders of shares and notes gains in capital and income.” The chairman of Taranaki (Mr G. B. Saunders) says in a letter to his shareholders that the company’s development in the Taranaki area is limited by not having areas of rapidly developing population, while many hotels are owned or controlled by other breweries. “The company can expand only by moving outside Taranaki,” he says. “A linking with Dominion Breweries and Tui would provide a coordinated and more economic bulk and bottled beer coverage for the southern half of the North Island.” Mr Saunders says the New Plymouth brewery would be maintained and its production increased to capacity to supply other outlets, with Dominion’s technical advice and assistance. Its brand of bottled beer would be retained, and where practicable it would be an alternative choice in Do-

minion’s 40 hotels. The brewery supplies 23 other hotels as well. “Taranaki directors recommend the bid for giving a capital gain and participation in greater growth potential,” he says. New Economies

Sir Henry Kelliher, the managing director of Dominion Breweries, says in a letter to Taranaki and Tui shareholders that numerous advantages to be gained stem mainly from anticipated economies in production and marketing. Combined growth would be greater than Tui and Taranaki could achieve as separate entities, he says. Separate identities and management will be retained, however.