Wormald N.Z. offer by Aust. parent

Press, 31 March 1989, Page 14

Wormald N.Z. offer by Aust. parent

PA Wellington Wormaid International, of Australia, announced yesterday it would offer SNZI.4S cash for each of the shares it does not already own in Wormaid International N.Z. ,

The offer will be made through its wholly owned subsidiary Watstone Eighty Seven.

Wormaid New Zealand’s price rose 27c to 145 c on the New Zealand Stock Exchange yesterday in reaction to the bid. However, turnover was minimal. Auckland sharebrokers, Doyle Paterson Brown, have been instructed by Wormaid to buy shares at $1.45 on market to enable shareholders to receive proceeds earlier if needed.

Wormaid already has Commerce Commission clearance for the takeover.

Chase Corporation (Australia) has a 44.9 per cent shareholding in Wormaid International, which said that through a series of purchases at prices of up to $1.45 a share it had increased its holding in Wormaid New Zealand to 75.4 per cent.

The chairman of Wormaid International, Mr Phillip Cave, said in a statement it was felt appropriate that shareholders or Wormaid New Zealand be afforded the opportunity to sell all their shares. He said those securities had become progressively less marketable as his company had significantly increased its holding in Wormaid New Zealand. He also said . that “shareholders may wish to avoid being exposed to the New Zealand construction industry given its uncertain outlook.”

According to Mr Cave, the offer of $1.45 a share represents a premium of 30 per cent above the market price before buying by Wormaid’s broker. It also values the company on prospective price earnings ratio of more than 11 times compared with an estimated average of eight times for the top 30 stocks. Mr Cave said that because Wormaid New Zealand is unable to pay a dividend this year, shareholders accepting the offer have the opportunity to reinstate their funds in income-producing securities which on the basis of the top 30 stocks would produce an estimated 9c a share. Shareholders will be paid within 14 days of receipt of a valid acceptance. It is expected that the offer will be mailed to shareholders within 21 days.