Berlei resolves to sell; may liquidate

Press, Volume CX, Issue 32430, 17 October 1970, Page 20

Berlei resolves to sell; may liquidate

(New Zealand Press Association)*

AUCKLAND, October 16.

The shareholders of Berlei Industries, Ltd, have, approved the sale of the group’s main business to Berlei-Hestia, of Sydney, but only by a small majority and after heated debate. The motion was carried by a show of hands, 42 for, 30 against.

The directors said that after the sale of Berlei (N.Z.) Ltd, the remaining subsidiaries, Woolcraft and Clipper would probably be sold and the group liquidated. Shareholders would probably recoup more than 100 c a share, although this could not be predicted accurately, they said.

The offer made by BerleiHestia was well below the book value of the assets, but was the best attainable in the present circumstances.

The write-down concerned mainly plant and stock, they said.

■ The bidder felt that, in spite of Berlei’s, traditionally conservative approach to valuation, much of the stock was obsolete, and some plant would have to be scrapped. The directors had considered piecemeal realisation of the company. However, most of the assets were stock, and forced sales of stock could be disastrous, so this proposal was unanimously rejected.

The sale of Berlei (N.Z.) alone would yield about 65c a share, compared with the

market price of 80c before the “don’t sell” warning was issued. In addition, there were assets with a book value about $600,000. Consequently on liquidation, shareholders could expect something more than par value. Berlei-Hestia had undertaken to maintain Belei (N.Z.) as a going concern, and would keep the present management and staff.

A shareholder asked whether the directors had "shopped around” for an alternative buyer on better terms and Mr N. L. Ross, a director, said there had been other interested parties; one had carried negotiations to an advanced stage before deciding against a bid. There were frequent outbursts from dissatisfied shareholders, and at one stage a large minority expressed a lack of confidence ip the board and management. After approving the sale, the meeting carried a motion changing the group’s name to Woolcraft-Klipper Holdings, Ltd. This name change was a condition set by BerleiHestia.