Smiths’ big take-over

Press, 18 January 1986, Page 21

Smiths’ big take-over

Smiths City Market Group, Ltd, yesterday launched a full take-over offer worth $l4 million for Irvin and Stem Holdings, Ltd, the Auckland-based company, which has 12 stores in the North Island. In addition, the directors of Smiths City Market also announced that they had agreed to buy Coles (Nelson), Ltd, a Nelson and Blenheim-based company, which has five stores selling furniture, floor coverings, and home appliances. The offer is five fully paid ordinary 20c Smiths City Market shares for four fully paid 50c ordinary shares in Irvin and Stern. For every four partly paid Irvin and Stem 50c shares, the offer is five Smiths City Market shares, but the five

shares also require a payment of 48c a share from Irvin and Stern shareholders. The chairman of Smiths City Market, Mr Kevin Smith, and the chairman of Irvin and Stern, Mr G. J. Stem, said in a statement ! that the Irvin and Stem directors had confirmed they intended to recommend shareholders accept the offer. The Irvin and Stern directors would themselves accept the offer. The two boards yesterday withdrew their “don’t sell” •notices, which had been issued on Thursday. The Irvin and Stern recommendation is conditional upon Smiths City Market receiving 90 per cent acceptance of the

shares whicE it does not already own. The bid is also subject to Commerce Commission approval. The two chairmen said the main object of the merger was to establish the largest furniture, floorcovering and appliance retail chain in the country. The combined group would have an annual turnover of about $l5O million from more than 50 stores, and employ about 1000 people. The bigger group would expand further in New Zealand and in selected activities overseas, they said. Smiths City Market has 38 stores in the South ■lsland, including 18 Noel Leeming television and appliance centres (this is an 80 per cent-owned subsidiary). >

The chairmen said that it was intended to expand the Irvin and Stem retail chain of 12 shops in the North Island to those areas not already covered. Smiths City Market would seek further expansion in the hardware and builders’ supplies sector after the purchase of Hopwood, Wemyss, Bendall Company, Ltd, the Blenheim company which has four stores, in November. Irvin and Stern also plans to expand its commercial building activities in New Zealand, Australia, and Asia, as well as expanding its New Zealand floorcoverings store in California. This is run as a joint venture with Cavalier Elco, Ltd.

Leyland Capital, Ltd, which has recently acquired a substantial holding in Irvin and Stern, had indicated that it would accept the offer. The payment of 48c for each Smiths City Market share by those Irvin and Stem shareholders having partly paid shares is the outstanding amount due on the partly paid shares. The take-over offer would be mailed to Irvin and Stem shareholders on February 7. Shares issued by Smiths City Market in the offer will rank equal to existing ordinary shares for any final dividend recommended in the year to April 30, 1986. Smiths City Market also announced yesterday that it had issued 800,000 ordinary shares as part consideration for buying Coles (Nelson). The remainder- of the purchase price was not disclosed.