Bids for Aust biscuit-maker

Press, 23 February 1985, Page 23

Bids for Aust biscuit-maker

NZPA-AAP Sydney The Biscuit maker, Arnotts, Ltd, is making a take-over bid for its associate, Allied Mills Ltd, pitched at the same price as the Industrial Equity, Ltd, 32.75 a share offer. The Arnotts offer is for all allied's issued capital in contrast to lEL’s partial offer for a controlling 44 per cent stake in the diversified food group.

However, both offers are well below the current market price for Allied shares of $3.25 each.

The Arnotts offer followed the company’s lifting its holding in Allied from 14.9 per cent to the 19.9 per cent take-over threshold, the same level as lEL’s holding. Arnotts is believed to have picked up more than 4m shares from the AMP Society, which announced it had reduced its holding in Allied to 10.86 per cent from about 14 per cent. Although Arnotts is considered friendly to Allied by virtue of Allied’s 19.9 per cent interest in the biscuit maker, market analysts are puzzled by the bid. “It’s obviously designed to protect their tails but, at the

same price as the lEL offer, it doesn’t seem Arnotts really wants Allied,” one analyst said.

The bid would make it more difficult for lEL to control Allied, particularly because Arnott was associated with another significant Allied shareholder, the New Zealandbased Goodman Group, Ltd. . Goodman’s holding of about 11 per cent was revealed early last week following heavy trading in allied shares around $3.25.

The New Zealand company’s move on Allied was viewed by the market as a bid to ensure control of Arnotts did not change hands and threaten the Arnotts joint venture in New Zealand with Goodman.

Goodman and Arnotts jointly owned New Zealand biscuit and confectionary manufacturer, Aulsebrooks, Ltd.

Allied directors said today they would meet soon to consider both offers but in a letter to shareholders delivered to the Sydney Stock Exchange they noted the company’s shares had traded consistently higher than the $2.75 a share offers by both Arnotts and lEL.