Selby rejects bid by Orion

Press, 14 April 1978, Page 10

Selby rejects bid by Orion

PA Auckland The directors of the Selby Shoe Company, Ltd, have rejected the offer of 210 c a share made by Orion Services, Ltd.

They' recommend that shareholders do not accept the bid because of the much better profit earned in the year to January 31, the growth record of the company, which indicated future dividends and capital gains for shareholders, and the financial strength, and assetbacking of its shares. As announced, the company increased its net profit 24 per cent to a record $109,133 in the latest year. A one-for-three bonus issue is to be made, and the recommended dividend is up from 14 per cent to 15 per cent (15c a share). The directors say that the company has more than doubled its profits since 1974, a period which includes an economic recession, and that this is an achievement that most listed companies would find difficult to match. In recent years the company has maintained a high level of liquidity, and because of this, it has been untroubled during periods of general cash-shortages, and is well-placed to expand its level of business activity

when the opportunity arises. The asset-backing' of each 100 c share at January 31 was 356 c. However, accounts for that date show the value of land and buildings was $450,000, compared with the latest Government valuation of $680,000. If this value is adopted in the accounts, the assetbacking rises to 448 c a share.

A realisation of assets would return a figure considerably higher than the 210 c a share offered, the directors say.

The bid from unlisted Orion Services places a total value of $528,307 on the company, which compares iwith its shareholders’ funds ■of $897,716 in the latest | accounts. Before the bid was announced, the shares last sold for 160 c each.