Email in bid for Rheem Australia

Press, 23 March 1988, Page 41

Email in bid for Rheem Australia

NZPA-AAP Melbourne The whitegoods manufacturer Email, Ltd, has launched ai sAust3B7 million (JNZ43OM) 'bid for BHP Co., Ltd, subsidiary Rheem Australia, Ltd, pitched at 235 c, a share, well below Rheem’s current market price. BHP, which holds 61 per cent of hot water systems maker Rheem, said in January it wanted to sell the stake as part of its restructuring. The announcement sent the Rheem share price soaring from 182 c. It closed on Monday evening at 270 c, up sc. Email said in a statement it had been! interested in Rheem for] years] and had made approaches to acquire it three years ago. It said it believed the offer valued Rheem fairly. It was a multiple of ,16 times reported earnings for the year ended November 130, 1987, and a substantial | premium over Rheem’s last reported net tangible asset backing of SI77M at May 31,! 1987. But a spokesman for Lloyds International, Ltd, which is advising BHP on the sale, said the share price of a company which had a 61 per cent majority shareholder was not necessarily a full indication of its true value.' “Now BHP has] announced its intention to sell, the share price might be a better reflection of its worth,” he said. Several other parties had expressed interest in Rheem. "We would expect this offer Is al shot jacross the bows — there’s] plenty of room for ] further developments.” | A BHP spokesman said the company had no comment on the Email offer at this stage. Email said it! will also make an offer for Rheem’s 10.38 million options,; though it gave no price. ■ : ' But it said the S3B7M value it put on the offer included shares and options, suggesting it was likely to offer about 323 c for the options. The offer is subject to 90 per cent acceptance, and to Foreign Investment Review Board approval because Swedish company AB Electrolux holds 19.9 per cent of Email. Email said the acquisition of Rheem would] give Email opportunities for growth in related manufacturing businesses in Australia and overseas.