Ireland Group sale clinched

Press, 21 November 1987, Page 29

Ireland Group sale clinched

Defiance Flour Mills, of Australia, has been successful in its take-over offer for Ireland Group, the Christchurch-based miller and baker. Yesterday’s announcement by the Australian company that it had received 100 per cent acceptance from the Ireland Group shareholders means that it has beaten a bid by another Australian firm, Southern Farmers Group, which is 64 per cent owned by the Australian Brierley Company, Industrial Equity, Ltd.

Southern Farmers Group, of Adelaide, made a 1375 c a share, or $16.5M offer, for the Ireland Group. The Defiance offer was lower than Southern Farmers, but the price was not disclosed.

The chairman of the Ireland Group, Mr Jim Ireland, said yesterday that what Defiance had

offered for the shares was confidential. Defiance held about 49 per cent of Ireland when the offer was made. Ireland’s was the largest independent firm milling and baking in New Zealand, milling 20 per cent of the country’s flour.

The decision to accept the Defiance offer was not caused by the proposed merger of Wattie Industries and Goodman Group, with its larger flour interests. Rather it had been prompted by the de-regulation of the milling industry, Mr Ireland said. Ireland’s has four flour milling companies, including D. H. Brown and Son, Ltd, of Christchurch, three stock-fed mills, and three bakeries, all in Christchurch. Mr Ireland said that although Defiance was a listed milling group, three

times the size of the New Zealand firm, it was still very much a family company with policies similar to those of the Ireland Group. Although no cast-iron guarantees could be given on the future of firms after only six to eight months into the de-regula-tion of the milling industry, the policies and outlook of the two groups were basically similar.

There had been close consultations between Defiance and Ireland’s. Defiance had worked longer in a de-regulated industry than Ireland’s, so it was able to come to grips with the market more quickly. The Defiance offer already had approval from the Commerce Commission and the Overseas Investment Commission. Mr Ireland will remain as a consultant to the firm.