Rex-CPD merger

Press, 7 March 1984, Page 25

Rex-CPD merger

PA Wellington Rex Consolidated, Ltd and Cable Price Downer, Ltd have agreed to merge. The move follows last week’s announcement that Rex was holding discussions with a “substantial New Zealand public company” and its advice to shareholders was not to sell.

Sir Lewis Ross, the Rex chairman, said yesterday that negotiations between the two companies had been entirely amicable. He and the Rex board’ were satisfied the merger would be in the best long term interests of Rex shareholders and staff.

CPD will make a formal offer to all Rex shareholders to acquire their total holdings of ordinary and specified preference shares in Rex on the following basis:

• For every eight Rex 50 cent ordinary shares, the offer will be five CPD $1 ordinary shares plus $4.00 cash. • For every eight Rex 50 cent specified preference shares, the offer will be three CPD $1 ordinary shares plus $2.40 cash.

Based on a market value of $4.80 for each CPD share, the offer will make each 50c Rex ordinary share worth $3.50 and each 50c Rex specified preference share worth $2.10.-

The offer of $3.50 for each ordinary share compares with a market value of about $2.50 before the "don’t sell” announcement, and about $3.05 after that announcement.

■The offer takes account of the proposed one-for-five bonus issue which Rex had announced and which has been reflected in the prices quoted on the stock exchange.

Rex would not now proceed with the bonus proposal pending the outcome of the CPD offer, Sir Lewis said.

Rex ordinary shareholders, will, however, receive the second interim dividend of 4 per cent previously announced and Rex specified preference shareholders will also receive the normal half-yearly dividend of 7.5 per cent payable on March 31.

Thereafter, the CPD shares to be issued to Rex shareholders will participate fully in the CPD final dividend normally payable in August. The formal offer documents are expected to be mailed to Rex shareholders about March 26. Until that time, the “don’t sell” advice will remain in force, Sir Lewis said. The Rex board unanimously recommended shareholders accept the CPD offer, and would be accepting the offer in respect of their own shareholdings, Sir Lewis said. The approval of the Examiner of Commercial Practices will be sought in accordance with the provisions of the Commerce Act.