Not willing to talk mergers

Press, 30 October 1981, Page 16

Not willing to talk mergers

There was no great enthusiasm to discuss company amalgamation at the seminar on the future of dairying in Canterbury held at Lincoln College last week under the auspices of the executive of the dairy section of North Canterbury Federated Farmers.

It came up only in the closing stages of the seminar in response to a question and while the chairman of both the Tai Tapu Central Cooperative Dairy Company, Mr J. B. Rainey, and the chairman of Canterbury

Dairy Farmers, Ltd, Mr E. F. Stokes, said that there had been discussions, both agreed that this gathering was not the appropriate one for discussions on sucb an issue.

Mr Rainey said that there had been discussions but there was no point in airing these things in public. Such a proposal, he said, would be, a major policy decision by a company and something that a company would have to talk to its shareholders about. The meeting at Lincoln College was not a meeting of shareholders of any particular - company. He thought it would be wrong for it to be discussed there ... Mr Stokes also concurred that the proper place to discuss such proposals was before shareholders.

However, Mr Rainey said that the boards of directors of the two companies had discussed this matter very fully and the shareholders of bis company at their last annual general meeting had been fully informed. He thought it fair to say that it was the general consensus at

this stage that there was very little reason to proceed rapidly with talks.

There were potential areas of cost savings, he said, as a result of getting together, but on examination some of these had evaporated. However, Mr Rainey said that there was reason for working together and for co-operation along the line- Indeed they were already joint owners of the Plains Co-operative Dairy Company and sooner or later the two companies would come together.

He also foresaw that in complete amalgamation cost savings would arise.

Mr Stokes said that there had been a meeting with shareholders of his company and they were aware of the present situation. He also agreed that there was a need for both groups to work closely together and saw a need for the establishment of goodwill between both groups of suppliers if amalgamation was going to happen.