FTC ‘don’t sell’ on $214M Chase bid

Press, 9 July 1986, Page 33

FTC ‘don’t sell’ on $214M Chase bid

PA Wellington Property and investment company, Chase Corporation, Ltd, yesterday announced a $214 million bid for the 72 per cent of The Farmers Trading Company, Ltd, it does not already own.

Chase is offering one Chase share for every three FTC shares, or a cash alternative of 180 c a share (ex dividend). One Chase share, or 570 c, is also being offered for every FTC specified preference share.

FTC directors, in a brief statement, advised shareholders not to sell until they issue a formal statement. Brokers said there were

few sales of FTC shares at 180 c on the market yesterday afternoon, after the announcement of the Chase offer, and FTC shares were bid up to 185 c.

The bid places a total value on FTC of $289 million, including the $75 million Chase has already spent on its 22 per cent holding. Chase, which in February took 20 per cent of FTC through a stand in the market, said that it had since purchased onmarket and off-market a further 8 per cent. Chase managing director, Mr Peter Francis, said the move was a further step in Chase’s planned diversification.

It had been apparent since February that the most appropriate course to maximise future returns to the shareholders of both companies was to seek a merger of FTC and Chase activities.

“If successful, our policy, as with our other operating subsidiaries, will be for Farmers to retain its independent identity and to operate as a separate autonomous unit,” he said.

Chase in March obtained Commerce Commission approval to acquire 100 per cent of FTC. Chase said the takeover documents should be in the hands of FTC shareholders within the

next two or three weeks. The offer is conditional on Chase taking its total FTC holding to 30 per cent

Chase said that for the purpose of the scrip bid it had valued FTC shares at 190 c each. Before the Chase bid for 20 per cent in February, FTC shares had been selling at 140 c each.

Chase is bidding on an ex-dividend basis so FTC shareholders who accept the offer will be entitled to retain their 3.5 c a share final dividend due in about two weeks. The statement said this increased the bid to 183.5 c for cash and 193.5 c for those taking Chase scrip.