Wrangle could ‘lock in Wattie’s shareholders

Press, 23 January 1984, Page 22

Wrangle could ‘lock in Wattie’s shareholders

By

NEILL BIRSS,

>, business editor

Investors’ eyes will be on the price of Wattie Industries shares today, the first of the “breather days” granted to N2. Forest Products.

The more than 22,000 holders of Wattie’s ordinary shares, and those who hold only the firm’s preference shares, would not have been able to accept the Forest Products offer in on-market transactions today, but for the' interim injunction granted by the High Court on Friday. This restrains the Stock Exchange from suspending trading in Forest Products shares, pending a further legal decision. The High Court on Thursday will do one of three things:

• Grant a further temporary injunction against the Stock Exchange suspension.

• Grant an unqualified injunction barring the suspension. 0 Reject the Forest Products submissions, meaning the suspension will stand.

But even if Forest Products obtains its injunction, the matter will not be ended. The Examiner of Commercial Practices, Mr P. E. Donovan, will have to rule by February 20 whether the Forest Products bid is acceptable.

Given the size of the companies involved, the dissension between them, the amount of public interest, and the hostile comments of the two main opposition political parties, Mr Donovan is likely to put the matter before the Commerce Commission for a full hearing. The odds are increasingly that those in Wattie’s who

accept the Forest Products offer will have their shares tied up for weeks, perhaps months, while the commission reaches a decision. The other Wattie’s shareholders will be affected, too, by the effect of the “freeze” on the shares’ market price.

A number of Wattie’s shareholders who for one reason or another do not want their capital tied up will therefore be potential sellers on the market in the next few days while the Forest Products offer is alive.

Material from a public relations consultant to one of the three parties in the Forest Products-Wattie’s-Goodman’s tussle has been circulated in the last few days, suggesting that there will be a dilution of earnings of 7 cents per share in Forest Products if the com-

pany obtains the 65 per cent of Wattie’s it seeks. Such estimates are based on projections from records of actions that have already occurred, of course. Ultimately what counts is what the new owners make of their additional assets. FOOTNOTE:—Mr J. M. T. Greene, former chairman of the Canterbury Chamber of Commerce and a wellknown Hereford Street broker, has been making statements on behalf of the Stock Exchange during the take-over dispute.

Mr Greene is national vice-president of the exchange, but has been its spokesman because the national president, Mr John Aburn, of Francis, Allison, Symes, in Wellington, is an adviser to Forest Products, and is not taking part in discussions of the take-over.