Bid for Mckenzies?

Press, 18 June 1979, Page 20

Bid for Mckenzies?

Commercial

PA Wellington A takeover bid for the variety store chain, McKenzies (N.Z.) Ltd. seems to be in the offing; the chairman iMr H. W. Huse) issued a "don’t sell” notice on the shares late on Friday night. Mr Huse said he had been advised of developments which mav affect the value of the shares in the company. “A further announcement will be made as soon as details are known. “Until then shareholders are advised not to sell their shares.” Mr Huse said he could not reveal any other details at this stage. “My purpose is to stop people selling their shares at this stage,” he said. The shares had an asset backing of 183 c a share at February 28 last year. They last sold at 65c. Rangatira, Ltd, has a controlling interest in McKenzies and the J. R. McKenzie family trust has a major shareholding in Rangatira. This involvement would presumably make it difficult for any bidder to gain outright control of the company. If a takeover price was made at the asset backing price of 183 c, the company would be valued at SI2M.

McKenzies began as a fancy goods store in Dunedin in 1910. Today it operates 47 stores in the North Island. 15 in the South Island, 13 mini-stores and five production units. In Christchurch it has stores at Colombo Street, High Street. Northlands. Riccarton, New Brighton and Sydenham. Like other retailers it was being affected by the static nature of the retail sector last year, and net profit dropped to $715,000 — its worst year since 1975. Paid up capital is 83.2 M, land and buildings were shown in the last accounts at SB.9M, at i cost, and total fixed assets I at 516.7 M. Its manufacturing subsidi- ■ ary, Roydon Textiles, Ltd, I has undergone mixed fortunes in recent times with a foray into the North American market undercut by cheaper Asian imports of men’s business shirts. In common with other garment manufacturers weakening demand meant curtailed activity. A takeover bid for McKenzies would be the second major merger in the variety store sector in recent months. Earlier this year L. D. Nathan and Company,

Ltd. accomplished a multi-1 million takeover of McKenzies' rival, the Woolworths I N.Z. Ltd, chain.