Support for Fletcher

Press, 24 April 1980, Page 19

Support for Fletcher

PA Auckland At least 254 shareholders in Carter Holt and probably 30 to 40 others have so far agreed to sell their shares to Fletcher Holdings, the High Court in Auckland heard yesterday. Mr John Wallace, QC, was making submissions before Mr Justice Mahon on his application for the court order restraining _ Fletcher from sending out its takeover offer to Carter Holt shareholders to be rescinded. He emphasised ..that Carter Holt shareholders should be able to decide for themselves on the merits of the Fletcher offer.

Initially, when Fletchers had made oral offers to major shareholders it had not decided what minimum shareholding it would seek. It was thought that at best 18 or 19 per cent of the Carter Holt capital would be available, said Mr Wallace. Instructions to the Wellington sharebroker Jarden and Company, were to make oral offers for not more than 25 per cent of the Carter Holt capital. At this time Fletcher did not own any Carter shares. Fletchers was “inundated

with offers to sell,” said Mr Wallace. It was the shareholders’ right to receive the Fletcher offer, he said. The Carter Holt directors wished to avoid this because they knew that shareholders would be willing and anxious sellers.

It followed from the volume of sellers that shareholders judged the price being offered to be very favourable. Mr Wallace said that Fletcher would make it a condition in any new notices of take-over sent to Carter shareholders that the placement of shares made by Carter directors after the take-over was announced be withdrawn.

One major aim of the placement was to buy time to promote some sort of other bid by a friendly source, sell assets, or take other defensive measures.

For Carter Holt, Mr John Henry, Q..C, said that Mr Wallace had made "quite unfounded” attacks on the motives of the Carter Holt directors. The directors had a clear obligation to ensure that any take-over offer was promoted according to law.

They were also obliged to ensure that shareholders were properly protected against improper or inadequate offers. Mr Henry said that the purpose of Fletcher’s takeover scheme was to avoid Carter’s taking the normal and expected courses of action open to it when a takeover was promoted. Those steps were to be taken in the interests of the shareholders as a whole.