Lichtenstein buys 20 p.c. of AFCo-op

Press, 29 October 1981, Page 24

Lichtenstein buys 20 p.c. of AFCo-op

PA Auckland E. Lichtenstein and Company, Ltd, has almost finished buying a 20 per cent holding in the stock and station agent. Allied Farmers Co-operative, Ltd, Lichtenstein shareholders were told at the annual meeting.

The on-market purchase, which Allied Farmers was not informed about until the latter stages, will cost the wool scourers and exporters more than $4.2 million. Allied Farmers’ issued capital on the August 1 balance date stood at 4,966,182 ordinary shares and 1,060,000 specified preference shares. Since balance date Allied Farmers have issued 350,000 ordinary shares in part payment for the Whangarei abattoir. The chairman of E. Lichtenstein (Mr P. W. Grayburn) described the move as the first major diversification in the company’s history. The purchase will be partly financed by Lichten-

stein’s recently announced two-for-five cash issue, which will raise $2,558,520. Both Auckland-based companies said they have held “amicable discussions.” The chairman of Allied Farmers (Mr D. L. Hazard) said one was always concerned when another company took such a large holding but added that Lichtenstein was not a competitor and supposed it was compatible.

Later, the Allied Farmers' directors made a statement to the stock exchange, which said in part: “We believe that the stock exchange and the A.F.C. shareholders should be informed. Lichtensteins appear a successful company with whom Allied Farmers does not see any conflict of interest.”

Mr Grayburn said. Allied Farmers was a very wellmanaged company and had a recent history of strong profit growth. ■ “As a regional stock and

station agency company, its main thrust is the servicing of the rural industry —' an industry in the future' of which we also have confidence,” he said. He told shareholders that Lichtenstein would be looking for representation on the board of Allied Farmers. Lichtenstein sales for the first quarter have increased 21 per cent, and net profit was also showing a very satisfactory increase, he said.

“The modernisation of our , two older scour lines was j carried out smoothly during' the winter, and we now have; all three scour lines, incor- • porating the most advanced ! technology, operating at full; capacity.” Mr Grayburn said the I company’s prospects were! excellent and that further! progress was ensured.

Lichtenstein authorised capital was increased from $1.5 million to $3 million to; allow the proposed cash issue to proceed.