Nathan’s spells out merger plan

Press, 21 May 1982, Page 16

Nathan’s spells out merger plan

PA Auckland The L. D. Nathan group will be well placed strategically for Closer Economic Relations with Australia after the investment in the company by Woolworths, Ltd, of Australia, according to the chairman of Nathan's (Mr K. V. Coe). The point is made in an address Mr Coe will give to the extraordinary general meeting of Nathan shareholders to approve the specified preference share issue and the increase in capital. Mr Coe's address is attached to the notice explaining the resolutions to be considered by the meeting, on June 10. One resolution is for the issue of 4.1 million $1 ordinary shares at a premium of $1 to Woolworths Australia. These would not- participate in the interim dividend payable next month. Under present legislation the S4.IM premium content would be available, subject to High Court approval, for tax-free distributions to shareholders. the deal, giving Woolworths a 16.3 per cent interest in L. D. Nathan, will be through the sale of a half interest in the Nathan's sub-

sidiary, W. H. Grofe and sons, Ltd, and joining Woolworths in buying the equity of a'- substantial Sydney exporter. “The twin companies," Mr Coe says, "will initially concentrate on developing exports from both countries to the Pacific Basin and Papua New Guinea. It is, however, intended that the activities will build to major international status."

It is not part of the present proposals that Nathan’s should take a reciprocal investment in Woolworths, he says. If the issue proceeds. Woolworths has agreed to be a long-term holder of its shares in Nathan’s. Similarly, Woolworths has agreed that it will not increase its shareholding to the point at which Nathan's would become an “overseas" company in terms of the overseas investment regulations.

Mr Coe says of the Woolworths issue that the introduction of more ordinary capital is necessary to provide the legal base required to make the 1982 specified preference issue. “All these moves are designed to prevent, or at least minimise disturbance to the local sharemarket."

The meeting will consider increasing authorised capital from S36M to S6OM. Other resolutions cover the issue of up to 2,120,000 18 per cent specified preference shares with a 250 c par value in the ratio of one-for-13. this will raise $5.3M. The shares convert one-for-one ordinary shares after seven years, on September 1, 1989, with a cash redemption alternative. Shares converting to ordinary shares will be entitled to any bonus issues: cash redemptions will not. Minimum parcels will be 100 shares. Rights to the issue will be traded. The issue is being underwritten by Jordan Sandman Smythe'and Company. Mr Coe says: “Your board and management see ahead opportunities to make considerable investments in the modernisation and expansion of the group's trading, retail and other, and at the same time ensure growth through diversification."

He says the company is also making an issue of ordinary shares to staff, at a premium, which will be widespread and based .on service. The group already has 253,140 staff shares on issue.