CBA Finance sells Cooks Wine shares

Press, 19 August 1981, Page 25

CBA Finance sells Cooks Wine shares

PA Auckland C.B.A. Finance Holdings. Ltd. has sold its 30 per cent stake in Cooks New Zealand Wine Company. Ltd, to the Hawkes Bay Farmers' Cooperative Association. Ltd.

The move consolidates the Hawkes Bay Farmers' diversification into horticulture, including grape growing.

It also opens up opportunities for Cooks Wine to expand in the Hawkes Bay and Poverty Bay vine-growing areas, including the possibiliy of siting a winery in the region.

’ The purchase of C.B.A. Finance to sell its 30 per cent in Cooks was disclosed some weeks ago. in line with its moves to concentrate on investments in line with its main finance activities.

At that stage McWilliams Wines N.Z.; Ltd, was named as a party involved in discussions. which were widely expected to lead to the wine company taking a 24.9 per cent interest in its competitor.

The sale instead to Farmers' avoids the attention that possible attempted concentration of the wine section might have attracted. A McWilliams purchase would have been just below the level requiring the consent of the Examiner of Commercial Practices, but even if a desirable entry for the wine company it would have raised questions of vertical integration. This

may have stymied any closer involvement, observers say. By purchasing the whole 30 per cent stake. Hawkes Bay Farmers’ move becomes subject to the examiner’s approval, but the issues present in. McWilliams case have been avoided. The consideration for the cash purchase was not disclosed.

A spokesman for C.B.A. Finance said the investment had filled its objective. A 25 per cent holding in Cooks was purchased by Transvision Holdings from Marac early last year, not long after an abortive take-over attempt for Cooks by Rothmans Industries. Ltd. This holding was later increased to 30 per cent. The holding was intended as a long-term investment, the company said, but circumstances changed when C.B.A. Finance acquired Transvision.

Cooks shares were selling around 130 c at the time of the Transvision purchase. They have lately been trading at a similar level. Whatever the profit' consideration. the sale rids C.B.A. Finance of a holding which it said was no longer in line with its objectives, and also frees Cooks of an involvement with financiers as major partners for much of its history. C.B.A. Finance said the agreement reached was a “positive step" for all con-

cerned, and was in the best interests of shareholders.

A joint statement to the stock exchange from Cooks and Hawkes Bay Farmers’ said the Cooks Board “looks forward to a long and profitable association together in the wine industry.

“With the Farmers' interests in Hawkes Bay and Poverty Bay, the grape growing areas supplying Cooks, their involvement is logical.” the statement said. "With the change in incidence in farming, in particular the move into horticulture. including grape growing. the board of Hawkes Bay Farmers’ sees its investment in Cooks as a natural addition to its already wide interest on the East Coast.”

The diversification move by Hawkes Bay Farmers’ is not inconsistent with what other farming companies are doing, observers suggest. It addition, many of Cooks grape suppliers are also members of Farmers'.

There are already suggestions that because of the size of the grape growing in the region, it could make sense to locate a winery at Hastings for example. The C.B.A. Finance representative will retire from the Cooks board to be replaced by nominees of Farmers’. A Cooks spokesman said a full announcement, together with changes to the Articles of Association, would be put to shareholders at the annual meeting in October.