Move on Goodman

Press, 2 November 1985, Page 21

Move on Goodman

PA Wellington Goodman Group, Ltd, has issued a “don’t sell” notice to shareholders, following an announcement by an Australian food group, Fielder Gillespie Davis, Ltd, that it intends to take over Goodman and another Australian company, Allied Mills, Ltd. Goodman’s managing director, Mr Peter Shirtcliffe, recommends that shareholders take no action until the board has asssssad the implications of the proposed three-way merger and determined if it will be in the best interests of Goodman shareholders. “However, first indications are that the conceptual approach fits with our previously expressed philosophies,” Mr Shirtcliffe said in a statement Fielder’s bid is subject to approval by both the Overseas Investment Commission and the Commerce Commission. If the directors recommend the offer be accepted, it could be the new year before a merger is consummated, he added. Fielder said in Sydney that it will offer five Fielder shares for each four ordinary shares in Allied and Goodman. Equivalent offers will be made for Goodman’s convertible securities, while Allied shares will be acquired exdividend.

Fielder said the merged group will be the largest food Sin Australia and New nd with a combined turnover of more than sAustL3B (JNZ1.578), if the take-over plan is accepted. Based on the pre-announee-ment offer price of sAust2.4s (3NZ2.96) for Fielder shares, the group will be capitalised at about sAust9ooM ($NZ1.08B). The company said Goodman shareholders will represent about half of the merged group and Allied shareholders about a third, assuming elimination of cross-shareholdings. Fielder shares traded at 235 c (Aust) after the announcement while Allied shares moved up 5c to 320 c (Aust) and Goodman closed at 375 c (N.Z.) yesterday. At 235 c (Aust) for Fielder stock, the offer values both Allied Mills and Goodman shares at 294 c (Aust) each. Fielder said the merged group will hold a number of major investments in other companies, including 20 per cent of Arnotts, Ltd, 14 per cent of Elders IXL, Ltd, 32 per cent of Wattle Industries, Ltd, and 24 per cent of Newmans Group, Ltd. It said the merger proposals have been discussed by representatives of the three companies but had not been considered by the boards of Goodman or Allied. Fielder’s managing director, Mr Duncan McDonald, said the merger is designed to assist in rationalising the Australian and New Zealand food industries. “The merger would create opportunities not only for scale

economies in domestic operations but exciting opportunities for international growth and expansion," Mr McDonald said. Fielder proposes the composition of the board of Fielder will reflect the changed nature of the company. Mr McDonald said representatives of both Allied and Goodman will be invited to join the board and the rhairman of Goodman, Mr Pat Goodman, will be invited to chair the merged group. Fielder said the merger will be implemented by simultaneous offers to shareholders of Allied and Goodman to be dispatched in about four

weeks. Both offers will be subject to 50 per cent minimum acceptance conditions and both are mutually dependent Fielder said it intends to apply for Stock Exchange listing of the Fielder shares in New Zealand. Goodman is just one component in a complex web of cross-shareholdings involving New Zealand and Australian companies. As at March 31 this year Goodman held 14 per cent of Elders KL (Australia), while Elders held 22 per cent of Goodman; Goodman held 33 per cent of Wattie, and Wattie

25 per cent of Goodman. While Goodman had no holding in it indirectly had an interest, through its holding in Wattie, as that company held 24 per cent in NXRP. tad a reciprocal 24 per cent interest in Wattie). According to Goodman’s 1985 annual report it held, indirectly, positions in Arnotts, Ltd (Australia), WaitaM NZR, Ltd, Newmans Group, Ltd, Mount Cock Group. Ltd, Anisebrooks. Ltd. United Dairy Foods, Ltd,. Saudi New Zealand Capital Corp., Ltd, Fermentation Industries (NX), Ltd, and Waihi Gold Company.