Government Not To Block Goodyear Bid

Press, Volume CIX, Issue 32265, 7 April 1970, Page 18

Government Not To Block Goodyear Bid

(By the commercial editor) The Government will not prevent the Goodyear Tire and Rubber Company, of the United States, from proceeding with its take-over offer for Reidrubber, Ltd.

The associate Minister of Finance (Mr Pickering), said in a statement last evening that Goodyear informed the Registrar of Overseas Takeovers of its proposed offer, and that “the Minister of Finance decided that there was no reason for further consmeration before the company proceeds with its proposal.” Mr Pickering also said that it would be inappropriate for the Government to make any other comment on a confidential business transaction. The Prime Minister (Mr

Holyoake), said after a Cabinet meeting yesterday that the Government saw no reason to interfere in the offer. He did not think the matter would come before the Government again. “I don’t know of any procedure where the Government can stop an offer,” he said. Although the Government’s approval is not altogether unexpected—Goodyear would hardly come out into the open without clearing such an issue first—the decision is likely to be unpopular with the New Zealand public, whatever the economic merits. As the Government must be aware of this, it might be asked whether there was some quid pro quo. Did Goodyear offer to increase exports of tyres, or to establish research facilities, or some such incentive?

Last year the Government blocked a take-over bid by 1.C.1. N.Z. for Guthrie Bowron. Yesterday Mr Holyoake said that he did not know of any procedure by which an offer could be stopped. Did Goodyear prove to be more intractable than 1.C.1.? From the viewpoint of economics the bid cannot be denied as against the national interest. Three over-seas-owned tyre manufactur-

ers would no doubt compete fiercely, and Goodyear might well prove a more redoubtable competitor with Firestone and Dunlop. . From a patriotic point of view one might feel regret. The Feltex-Reidrubber concept was not without attractions.

It must now be left to the decide whether their patriotism is worth about 30c a share.