Grosvenor, Kupe reverse take-over

Press, 31 January 1986, Page 10

Grosvenor, Kupe reverse take-over

Kupe Petroleum NL and Grosvenor Properties, Ltd, have agreed to merge and become an investment firm. Kupe owns 52 per cent of Grosvenor. Kupe has been diversifying from oil exploration with purchases in insurance and plant nurseries. It bought Fletcher Challenge’s stake in Grosvenor Properties in July last year. The merger will be a reverse take-over, Kupe shareholders having a majority of the shares in the enlarged group, but Grosvenor being the vehicle of the take-over. The scheme is: • Grosvenor will split its shares from 25c each to 10c. The net tangible assets at March 31, it is estimated, will be not less than 250 c per 25c share, or 100 c per 10c share after the split

• Grosvenor will make an offer to acquire the issued captial of Kupe by offering five fully paid new ordinary shares of 10c each for every eight ordinary Kupe shares paid to 40c.

• Grosvenor will make an offer to acquire the Kupe options by offering one Grosvenor 10c share credited as paid to 2.5 c for each one Kupe option. The uncalled capital of 7.5 c plus 67.5 c premium will be payable in two calls, 35c on June 30, and 40c on June 30 next year. • The Grosvenor shares at present owned by Kupe will be placed upon completion of the merger.

• The authorised capital of Grosvenor will be increased to facilitate the new issue.

Nominated Securities, Ltd, which holds 64.2 per cent of the Kupe ordinary shares and 44 per cent of the options, has indicated that it will accept the offer.

Mr Peter Grayburn, chairman of Kupe, and Mr Jack Radford, chairman of Grosvenor Properties said the new group would continue to acquire wholly owned operations which had strong cash flows and profit potential, and would expand its investment base to secure holdings in publicly listed

securities which offer potential for growth. The property investment portfolio held by Grosvenor would be expanded as property development opportunities were pursued. Mr Grayburn and Mr Radford say the merger will allow a more efficient utilisation of resources within the companies. Significant cash flows will be available to the group from:

• The placement of the Grosvenor shares currently owned by Kupe.

• The inflow from the partly paid Grosvenor shares issued in lieu of the Kupe options. The directors of Kupe and Grosvenor are satisfied that the scheme is in the interests of shareholders in both companies.

Projections indicate a company with about SBSM in shareholders’ funds once all shares are fully paid. Projected profit after tax for the first year’s operation is 12c per share.

An increased dividend pay-out is planned for shareholders in the new group, the chairmen say.

The Grosvenor directors received a report from Renouf Corporation, Ltd, supporting the proposal. The directors of Kupe, based on the advice of its advisers is recommending the proposal to its existing shareholders. The Kupe directors will accept the offer in respect of their own shares. Grosvenor will be required to call an extraordinary general meeting of shareholders to approve the capital increase and the share split. Mr Grahame Hamilton, managing director of Kupe, will become chief executive officer of the group, and Mr Derek Smith, general manager of Grosvenor, will accept responsibility for the pro-perty-management interests of the group. The directors of Kupe will join the Grosvenor board.

Mr Grayburn and Mr Radford ask that shareholders in each company await the full plan and future projections.