The Hooley Scheme.

Hastings Standard, Issue 371, 13 July 1897, Page 4

The Hooley Scheme.

OUTLINE OE THE TROI'OSALS FOR THE COMBINATION. Messrs Not ton, Smith and Company, solicitor.-. Sydney, have been communicated with under date May 21 by the solicitors of Mr Ernest T. Hooley (Messrs Ashwell and Tntin, of Nottingham) concerning the scheme for the amalgamation of the Australasian meat companies. The letter of Messrs Ashwell and Tut-in says : " The attention of our client has been directed to the position of the frozen meat, and he has instructed us to communicate with a firm of solicitors in each of the colonies of New Zealand, New South Wales, Victoria, and Queensland. At a conference held but a few months ago, when all the leading importers, managers of banks, and others immediately interested, met Mr Twopenny, a representative specially sent to England on behalf of the freezing companies of Australia, the conclusion arrived at was : ' That no permanent improvement in the trade could be expected until the freezing companies in the colonies arrived at an agreement whereby the supply to the I3ritish markets may be judicially regulated.' " The facts as represented to Mr Hooley are that annually large numbers of frozen carcases and quarters of beef are shipped from Australia and New Zealand to this country (the imports of sheep and lamb for 1896 amounting to close upon 4,000,000 carcases, besides 25,000 tons of beef). The sheep were sold at prices varying from say 2d to per lb, lambs of course making a higher average. "There does not appear to be any reason, save the want of combination and organisation amongst the growers and importers, why another Id per lb or even more, should not be obtained. " An additional Id per lb on the sheep and lambs would mean something approaching 4s per carcase (an increase in price that should not affect the sale of the meat), which, distributed amongst the growers and shippers would represent a sum of over a quarter of a million sterling. " With the co-operation of those most interested in the trade, Mr Hooley is prepared to form a combination on the lines indicated in this letter, which he believes will place the trade upon a satisfactory footing, and he has instructed us to open up negotations with the various refrigerating companies in New Zealand, New South Wales, Victoria and Queensland, with this object in view. " It will at once be seen that an amalgamation is only to be obtained by operating upon a comprehensive basis, and that any attempt to negotiate for the absorption of each company strictly upon its own merits must fail. It is upon the broad lines indicated that we wish you to approach the directors of the refrigerating companies in your colonies, asking them for a definite answer within a time which please fix as early as convenient, but not later than fourteeen days after they have received your letter. " The proposal we have to make on Mr Hooley's behalf is that, provided a sufficient number of refrigerating companies can be purchased by him, they be amalgamated into one combination with a larger capital than the amount of the aggregate value of the separate concerns. " The old companies to be purchased as going concerns as from the date of the 'ast balance sheets submitted to the shareholders, upon the following terms : " 1. The purchase price to be an amount equal to the net assets as set out in the last balance sheet, together with " 2. A bonus equal to the aggregate amount of dividends paid during the last seven years, or pro rata as for seven years when the company lias not been established so long." Hero follow business details as to the issue of stock, debentures, &c., already known by cable of June 21"st. " The new company would be administered from London by a board of governing directors, two-thirds of the original board being selected from a list of nominees supplied by the old companies. " Provision will be made in the articles of association of the new company for the appointment of local directorates, so that the past adminis-* tration of each particular company need not be disturbed. " In an amalgamation like this it is impossible to formulate a proposal which would place each concern in precisely the same relationship with every other concern, and it would be well for you to point out to the directors of each company that they must please consider whether the terms proposed are such as they can recommend their shareholders to accept, and not as to whether the terms proposed give either more or less favorable results to concerns which are now competitors of theirs. " You will readily understand that no counter-proposal can be considered here, and cables sent to us should—as provided by the code words enclosed — state directly, in the affirmative or in the negative, whether the directors of the particular company referred to have adopted the accompanying resolution, giving to Mr Hooley the required option of purchase of their company (subject to confirmation by the shareholders in general meeting), and recommending that such option be approved and confirmed by the shareholders. " If there is any exceptional circumstance in respect of, say, one of ths companies, which you can deal with without disturbing the basis of the scheme, you may deal with it yourselves, always bearing in mind that any substantial divergence would probably prejudice the whole undertaking. " If the first cables received from the several colonies giving|the dec ons of the directors justify Mr Hooley in

proceeding wish the amalgamation, we shall cable yon to arrange for the necessary meeting of shareholders, to hj? iyj.l s soon as the statutory notices will permit, after which vrw wi-l pleas? cable us fcha decisions of tbo shareholders' meetings. "By the time the shareholders' meetings are held we hope to have received from you in respect of each company: " Copy of resolution of directors. " Pro form a account of sale, on one of the printed forms enclosed herewith. " Prints of the last and previous balance-sheets. " Names of three gentlemen for selection as members of the governing board ; and " General information for prospectus purposes. " If there be a genuine desire on the part of the companies to amalgamate, it is probable that the new company will be formed immediately we receive cables notifying the approval of the shareholders of a sufficient number of companies, and before we receive the letters containing the resolutions adopted by the shareholders. "If the directors of any of the companies giving the opinions, or their nominees, would like to participate with Mr Hooley in the promotion of the new company, they may do so up to an amount not exceeding the amount of the share capital due to their particular company. Those so participating must undertake that if the whole of the capital of the new company be not taken up by the public they will subscribe ov obtain subscriptions for their proportions of such unsubscribed capital to the extent of their respective risks,"