NZ Equities gives notice of full bid for UEB

Press, 21 November 1986, Page 10

NZ Equities gives notice of full bid for UEB

PA Wellington The Auckland-based investment banker, New Zealand Equities, Ltd, has given notice of a full takeover bid for the large diversified manufacturer UEB Industries, Ltd. NZ Equities already controls about 20 per cent of UEB, while NZ Forest Products has about 35 per cent.

Auckland-based UEB yesterday issued a formal don’t sell notice, pending a recommendation from its board on the cash and/ or scrip offer.

The bid is 185 c a share cash or one New Zealand Equities share plus 20c cash for every two UEB shares.

For 12 per cent specified preference shares it is 225 c a share cash or three shares plus 25c for every five UEB shares. For 15 per cent specified preference shares it is 135 c a share cash or two shares plus 15c for every five UEB shares. And for 6.5 per cent preference shares it is 100 c a share cash or one share plus 20c for every four UEB shares.

The offer is conditional on Commerce Commission consent and a minimum level of acceptances of not less than 30 per cent of the total issued capital.

UEB is a maker of cardboard boxes, cartons, wallpaper, plastics and

paper converters and textiles. UEB originally stood for United Empire Box. A big stake was acquired some years ago by NZFP when it successfully offered to buy 40 per cent of UEB shareholdings. New Zealand Equities said the public shareholding in UEB was about 40 per cent with the balance held by NZFP, New Zealand Equities, Ltd, and Zino Securities, Ltd. Following the acquisition earlier this year by Zino Securities Ltd of 20 per cent of UEB, the New Zealand Equities chairman, Mr Avon Carpenter, and managing director, Mr P. J. Francis, had joined the UEB board.

It said it was no secret that UEB, like a number of other industrial groups, had for a variety of reasons suffered poor trading performances in recent times. While New Zealand Equities was confident the manufacturing operations of the group were basically sound and that "substantial steps had been taken toward reorganisation, much restructuring and redirection of the company’s thrust of activity must take place if UEB Industries was to regain its former pre-emi-nence as a manufacturing entity.

This view was shared by the other big shareholder NZFP, and in the

circumstances the directors considered a full take-over of the company was the best method to achieve the necessary changes.

New Zealand Equities said that calculated on values at the close of business on Wednesday, the offer placed a value for holders who accept the scrip and cash alternative of $2 on each UEB share.

This represented a significant premium on the average price of UEB shares in recent times and took no account of the value that the free options, also announced yesterday, may add to the New Zealand Equities share price.