Dunlop May Enter N.Z. Textile Scene

Press, Volume CIX, Issue 31986, 13 May 1969, Page 24

Dunlop May Enter N.Z. Textile Scene

(N.Z. Press Association—Copyright)

MELBOURNE, May 12.

Dunlop Australia, Ltd, today stepped up the pace in its hectic expansion programme with a $92 bid for Factors, Ltd, which may make Dunlop a force in the New Zealand textile industry.

Factors is the last important unit of the ill-fated Korman empire which crashed in the credit squeeze of 1960-61. Its only significant source of income is the highly profitable New Zealand textile group, Holeproof Industries of N.Z, Ltd.

The details of the offer were announced by Factors in a brief statement to the Stock Exchange this morning. Later, the chairman and chief g rneral manager of Dunlop (Mr E. E. Dunsbea) said the offer for the ordinary shares was subject to 90 per cent acceptance. The preference offer was subject to acceptance by at least 90 pet cent of preference shareholders, and also to acceptance by at least 90 pet cent of the ordinary shareholders involved in the share swap. Asked if Dunlop might be outreaching itself in the takeover field Mr Dunshea said:

The Dunlop bid is one of its SI ordinary shares for every four 50c Factors ordinary shares, and $2 in cash for each Factors $2 preference share. This values Factors’ shares at about 59c. They last sold in New Zealand at 40c. Factors has 15,169,183 ordinary shares and 50,000 preference shares, so the Dunlop offer, if successful, will involve the issue of nearly 3.8 ; million of its shares, worth < about s9.lm at current market prices. In addition, the preference offer would cost Dunlop $lOO,OOO cash.

“This take-over satisfied our two main tests. “These are that the company must have expert management and must be either earning or on the point of earning more than 20 per cent on capital.” The managing director of Holeproof, New Zealand, is Mr Hilel Korman, the brother of Mr Stanley Korman. Mr Dunshea said: “We think Hilel is a wonderful bloke. He has that New Zealand company really ticking. We will be leaving the company very much in his hands.” Asked about Mr Stanley Korman, a former joint managing director for Holeproof, Mr Dunshea sai(l: “Stanley has no connection with the company now. He is living in America, I think.” Apart from Holeproof, Factors’ main asset is real estate in Australia, including 784 acres at Tullapiarine, near Melbourne, which is being developed. “Some of the property subsidiaries probably will carry on, Mr Dunshea said, but 1 think we will get the Tuliamarine land off our hands fairly quickly.”