Take-over procedure criticised by Gear

Press, 24 August 1977, Page 23

Take-over procedure criticised by Gear

PA Wellington Criticism of New Zealand legislation allowing a competing company to announce only that it intends bidding for another company has been strongly criticised by the managing-director of the Gear Meat Company, Ltd, (Mr L. A. Cameron). He said that this procedure which was not allowed | in most countries overseas, created a great deal of uncertainty and did little to encourage better industrial relations. He was commenting on the intention of Borthwicks to bid for Gear Meat. It was announced on Monday that the Government had accepted the Meat Industry Authority’s recommendation declining Borthwick’s take-over proposal. Mr Cameron said his company had been left in a state of uncertainty for three months while lengthy procedures were gone through to decide whether the take-over proposal was acceptable. “This sort of thing is so inconsistent within the industrial society we have today. Politicians get upset with managements not deal- !

i ing properly with industrial: relations. 3 “Yet to allow this sort of ■ thing is so damaging not 5 only to us but to our ’ employees too,” he said. 5 “In most overseas coun-i f tries a competitor is not B permitted to announce an in- 1 tention to take-over a com-; peting company unless he - proceeds within a very short' 1 period — maybe one or two , weeks. - He said this type of procedure did not exist in I'New Zealand. When such a large staff i: was involved as in the meat 5 1 industry, he said, this procedure was not the way io good industrial har1 mony. _ He suggested that Borth- ' wicks, having announced a ’ bid, had got “tangled up” in ’ procedure. Mr Cameron was not ’ against take-overs, but he 2 said there was a large gap : )in the whole approach taken ■lin this instance. ’ “Legislation at least in; r this respect has got to be ! looked at,” said Mr Cami eron. : Meanwhile the joint com- i s pany set up by Hawke’s Bay t; Farmers’ Meat Company, •'Ltd, and Brierley In-

I vestments, Ltd, will not be (making a formal offer for further shares in Gear Meat, Company, said the general; manager of Hawke’s Bay' I Farmers Meat (Mr lan Cam)eron). ; He said the joint com-; ipany, which will be registered under the name of ‘ East Coast Consolidated Ltd, (already held a “substantial”; shareholding in Gear. Now that the Government! I had formally approved the (shareholding in Gear, the . new company would buy shares on the Stock Ex-; change as they became available. When Brierley Investments and Hawke’s Bay; Farmers Meat said nearly a month ago they were seek-) ing approval for the joint I shareholding, they had 28 per cent of Gear shares. The companies said then they were seeking approval to build up their shareholding to 40 per cent of the 1 total. The formal arrangements, including appointing directors of the joint company to Gear, are expected to be completed at a special meet-) ing of Gear on September 15.