Ravensdown makes bid

Press, 11 April 1978, Page 1

Ravensdown makes bid

The Ravensdown Fertili* ser Company yesterday made its formal offer for the shares it wants in Kempthorne Prosser and Company, Ltd. The bid is 230 c for each K.P. ordinary share, and 2)oc for each preference share. The bid terms are the same as were discussed at a meeting last week between Ravensdown and K.P. directors, after which K.P.’s chairman (Mr P. W. Fels) said the price had been rejected as pletely unacceptable. Mr Fels said last evening that the board would consider the matter on Thursday, and that he had no doubt the reply would be the same — that the bid was “completely unsatisfactory.” The market had been assessing the value of K.P. shares at 260 c, Mr Fels said, and the asset backing

had been calculated at 429 c after the half-yearly report at the beginning of February.

Kempthorne Prosser shares were traded on stock exchanges yesterday at 260 c for ordinary shares and 235 c for preference shares. Meanwhile, Ravensdown has filed a prospectus for an issue of 10M 100 c shares. The authorised capital of the company is SIBM, made up of 15M ordinary 100 c shares, and S3M in 100 c 12 per cent redeemable preference shares. Of this capital, 2,278,914 ordinary shares have already been issued; 2,72i,086 ordinary shares and the whole of the pref* erence capital are being held in reserve.

The purpose of the issue is to provide funds to buy

Kempthorne Prosser shares.

“The cash offer for K P. is significantly above the independent assessment commissioned by New Zealand Farmers Fertiliser Company last year: It is also well above the true market price — to which the shares will return al the end of the current activity,” said Mr P. H. Elworthv, chairman of Ravensdown. “In addition, Ravensdown guarantees the position of employees, under a Dunedin-oased board of directors. Present management will continue in both the fertiliser and pharmaceutical divisions. The company will continue to trade under the Kempthorne Prosser banner to perpetuate a century of farming tradition,”

he said.

“Farmers will subscribe to 20 shares per tonne of fertiliser used. Each share will be paid to 25c, equivalent, to $5 a tonne. After retention of 50 per cent of the cash flow within Kempthorne Prosser to meet the repayment of existing borrowings, repairs and maintenance, future capital expenditure, etc., Ravensdown will receive 26c a share. “Of this 26c, 14c will he used to pay interest and principal on its borrow* ings, and the other 12c paid as a cash rebate on shares. This return to shareholders of 12c a share will be 48 per cent on their funds invested, or a reduction in the price of fertiliser of $2.40 a tonne; This wili increase significantly as interest and principal payments reduce,” Mr Elworthy said.