Wattie bid succeeds in double-fast time

Press, 21 April 1982, Page 22

Wattie bid succeeds in double-fast time

Wattle Industries, Ltd, yesterday ' filled its order for almost 10 million Waitaki N.Z. Refrigerating, Ltd, shares in one of the fastest operations seen on the New Zealand stock exchange for some time.

Fifteen minutes before the beginning of leading on the exchange floors, at 9 45 a.m., the brokers acting for Watties, Buttle Wilson, were able to announce that the target had been reached and. that they had withdrawn from the market.

This was at the time that the Waitaki directors were meeting to consider the applications o'f the Wattie offer.

Mr Neilson, Waitaki’s chairman, greeted the news that Watties had succeeded in acquiring a 24.9 per cent shareholding in the meat company yesterday, with a statement that Waitaki’s directors were seeking a legal opinion. Mr Neilson said that the full board had not yet had a chance to" meet and consider .the Wattie “offer,” but that a committee of directors had discussed the legal consequences of the move. He said that his directors were gravely concerned that the offer — which saw 9.9 million Waitaki shares change hands between the close of trading on Monday and yesterday morning’s opening — was filled more than half an hour before the 10 o’clock call. Mr Neilson said he had not changed his view that the offer, of 285 c for each ordinary share and 255 c for each specified preference share, was “ungenerous.” Even if entitled, and had

he had the opportunity to do so, he himself would not have accepted the Wattie “offer” in respect of his own holding, said Mr Neilson.

He said that he believed that all other directors would adopt the same stand in regard to their holdings. Before he could make a full statement, - the directors would have to consider a legal opinion which had been sought, said Mr Neilson. Mr Neilson said all his colleagues felt that the nature , and speed of the transaction failed to recognise the interests of all members, particularly small shareholders to whom the chairman of Watties had referred in his statement.

Investors have recently showed concern over the outlook for the meat industry, because of such factors as the effect of the U.S. recession on meat trading there, fluctuating prices on the U.K. market, no conclusion yet to lamb deal talks in Iran, and fast filling coolstore freezer space in New Zealand which could lead to reduced killing.

The chairman of Watties (Mr W. T. Morriss) referred to this attitude on Monday, in his statement.

Although the meat industry was currently experiencing some difficulties which might be unsettling to private investors, Watties was making a long-term investment which it believed was “very sound.” Mr Morriss said. He added that Watties believed Waitaki had the skills and resources necessary > to adjust to changing circumstances in the industry.

The timing of the Wattie operation also took advantage of the fact that many financial institutions are in need of extra funds to place an extra one per cent in local body stock, required by the Government before August 11.

The requirement would cost the institutions about $6O million and the Wattie offer must have seemed worthwhile at this time.

At the end of last year, the AMP Society was shown as the biggest institutional shareholder with 4.3 per cent of the Waitaki capital, plus a further 1.3 per cent in the number 2 account. National Mutual Life was next with 3 per cent, and the Government Insurance Commissioner with 1.4 per cent; Norwich held 1.1 per cent, and Penthouse Nominees 1.3 per cent. However, Buttle Wilson said last night that although some shareholders — both institutional and private — would be disappointed at missing out, in fact 12.6 per cent of the shareholders had sold 24.9 per cent of the stock.

They added that Watties said more than 1800 private shareholders sold 3.4 million shares with the.early instruction coming from both priv■ate sellers and institutions. Watties said parcels of shares ranged from as low as 100, with the average being about 1900.

“In fact, some institutions and pension funds who required time to consider the matter found .that Watties had withdrawn from the market before they were in a position to confirm a decision,” the statement said.’

Twenty-nine per cent of the value of transactions were handled by other than organising brokers, Buttle Wilson said.