BHP buys into Elders

Press, 15 April 1986, Page 30

BHP buys into Elders

PA Melbourne Takeover target BHP today revealed it has taken a substantial stake in Elders IXL, the company that last week launched an sAustl.7 billion (SNZ2.2I billion) share swoop on the “Big Australian.”

BHP’s chairman, Sir James Balderstone, said the company had bought a large parcel of convertible bonds in Elders in Europe last week.

Sir James said BHP had acquired $U5105.2 million ($NZ190.4 million) convertible Elders NV bonds, convertible to about 46.7 million ordinary shares in Elders IXL, Ltd, at any time to July 15, 1994.

Elders last week announced it acquired slightly more than 19 per cent of BHP’s issued capital in a move which anlaysts believed was designed to defend BHP

against Bell Resources, Ltd’s take-over offers.

Sir James denied this, saying BHP had no knowledge or forewarning of Elders’ share purchases.

He said there was not only any agreement or understanding concerning the acquisation.

Sir James said Elder’s chairman, John Elliott, had confirmed that his company’s actions had been directed to acquiring the shares as a long term investment, and that Elders was not seeking to interfere with BHP’s independence. The cost of the bonds was SA2I6 million (SNZ2BO.B million). As well it had acquired sAustlOOO million (SNZI3OO million) of Elders IXL preference shares effectively convertible to ordinary shares at any time at a conversion price of $4.35 per share.

The parcel would, on conversion, entitle BHP to 12,6 per cent of Elder’s issued ordinary capital.

Sir James said the redeemable preference shares carried options to convert into ordinary shares to allow BHP to maintain a holding of up to 20 per cent of Elders’ issued capital from time to time. Sir James said funds available to Elders as a result of the investment would be used by Elders to further its international expansion.

He said BHP had some time ago started discussions with Elders about making a significant investment in Elders which had resulted in last week’s purchases.

Sir James said Elders was dedicated to earning high rewards for its shareholders and BHP intended to share in this

growth. “BHP has also achieved rapid growth in recent times and is similarly dedicated to providing benefits for its members,” he said.

Meanwhile, Bell Resources, Ltd, announced a four for five rights issue of fully paid ordinary shares at $3.50 to raise sAust623 million ($NZ809.9 million) to shareholders registered on April 29. The issue price compares with the current share market price of $4.75 for the fully paid ordinaries. Bell Resources said it would also offer four ordinary shares for every five convertible preference shares and partly paid ordinary shares. The Bell Group Ltd will take up its full 47.04 per cent entitlement to the issue, Bell Resources said.