Firm ‘always sure'

Press, Volume CXV, Issue 33932, 27 August 1975, Page 1

Firm ‘always sure '

The chairman of the N.Z. Refrigerating Company, Ltd (Mr C. S. Peate), said that the directors of the company had always been reasonably confident of shareholder support for the three resolutions necessary for the merger with Waitaki Industries.

He had been asked to comment last evening on the outcome of the meeting. "We were not unduly concerned that we might fail to pass the special resolutions,” Mr Peate said. "The directors realised that the merger terms could proceed without those, because the Waitaki directors had agreed that if the special resolutions were not passed they would waive these conditions. “These details can in any case all be settled after the merger is consummated and the offer of N.Z. Refrigerating to Waitaki has become unconditional. "A meeting of all shareholders may be called at that stage to get acceptance of the questions that are now left in abeyance.” Mr Peate said. ‘Public defeat’ The procedure at the meeting was excellent, and the chairman (Mr C. S. Peate) had behaved as a gentleman, the chairman of Southland Frozen Meat, Ltd (Mr A. F. Gilkison) said last night. “At the same time, the meeting was a public defeat. Two special resolutions, put to a special meeting by its chairman and seconded by its deputy chairman were soundly defeated—an unprecedented occasion in New Zealand commercial history,” said Mr Gilkison. “In view of this rejection by the shareholders of N.Z. Refrigerating, it becomes clear that a very significant number realise that the proposed merger with Waitaki Industries is at their expense. Proxy strength “Our proxy strength was overwhelming, and we belieVe that those shareholders who entrusted us with their proxies will as a matter of course endorse that action by accepting our proposals.

“The shareholders of N.Z. Refrigerating are being offered an immediate magnificent capital gain, and very much improved dividend prospects based on the strength of S.F.M. and the benefits which our management and direction can give to the merged enterprise of S.FM. and N.Z.R.

"I say ‘merger 1 because we firmly believe that only a true merger, and the acceptance of all concerned of its advantages. will benefit the shareholders of N.Z.R., the shareholders of S.F.M., the New Zealand meat industry, and even more important, the strengthening of the New Zealand image in all international markets.

"T also sav that if this proposed merger of N.Z.R. and Waitaki is successful, the shareholders of N.Z.R. will finish with 38 per cent ownership of a grossly overcapitalised enterprise totalling $27.4m. “They should realise that If they proceed with this they will be the sacrificial calves. “On the other hand, if they accept the proposals from S.F.M. they will finish — in addition to the benefits mentioned earlier — with a 54 per cent ownership of a merged enterprise with a total capital of $162m.” Profit estimates Referring to profit estimates. Mr Gilkison said that Waitaki forecast a profit of $4.5m, but had not said if this profit was maintainable. But S.F.M. had said that, based on conservative, prudent estimates, its maintainable profit would be s4m a year. This meant that on the Waitaki forecast the earning rate on capital would be about 16.4 per cent, or very much less than the earning rate on capital of S.F.M. of 24.7 per cent, Mr Gilkison said.