THE COMPANY’S OFFER

Hawera Star, Volume XLVII, 10 August 1928, Page 4

THE COMPANY’S OFFER

POWER BOARD’S REPLY TO MR DIXON.

MR BONR DOES NOT . “WITHDRAW.”

CRITIC’S READING OF OFFER CHALLENGED.

(To the Editor)

Siir, —Mr Dixon in Jus letter published last alight, says Ini® figures mate it clear that all the Power Board would) have had -do pay if they had accepted the company’s offer was £127,310. Again, lefeiring to the company’s offer, he isays that the company’s 'letter said distinct’y £140,000 Haas liabilities. He states his experience of public- life ha.s made him careful. Let u s see !

The .letter conveying the offer of the company was published in your issue of .Jline 16 last. Has SVIr l>ixori aeadi ■r ? Ha entirely mis-states the position.

Brieflv out, ■l' The offer was NOT £140,000 LESS- liabilities.

(2) Tl-y- offer WAS £140,000 PLUS something more.

(3) Tim company itself was to pay all liabilities.

(4) The' board was to- indemnify the company against the possibility of certain claims.

(o) Under the terms of the offer the hoard would have had to pay approximate! v .1:145,000.

What the company ofibred was to .sell its undertaking, its fund and its .ights, its buildings and materials and plant to the board for £140,000. In addition the board was to take over stocks at a valuation. These would, .perhaps work out at about £SOOO. The company was to retain all its cash, its book debts, its investments and its accrued and undeclared profits and its reserve funds. ' The ompany (mark that, Mr Editor), the company was to d ischarge any debentures, mortgages or charges on the undertaking or property. The board was to undertake and fulfil any current and unexpired contracts of the company and to indemnify the company against actions, proceedings, claims and demands in respect of the same. I hand you herewith the original letter dated 16th June, from the company to the board conveying the above offer and invite you to publish ■it. Tt-iis signed, as you see, by Mr P. W. Lamb, the company’s manager. Mr Dixon states that neither the board nor 1 understand the offer made the company, and modestly infers that he alone as right. There can be no question of what the company’s letter means, and Mr Dixon has made another error in judgment—or has h)3 'been a litt'e hasty? I trust he 'will do the graceful thing and acknowledge his mistake. Care is desirable in public matters before statements nir© made without authority. As to the matter of inspection of the company's books and .papers. The question is a practical business one. What the board asked for, and what tlie company promised was that the board, bv its representatives, should! have full access to all the company’s books, papers and deeds affecting the price with every facility for the board’s repuesentatives in perusing them and n making extracts and copies. The company’s chairman, Mr Payne, promised this, and so did the manager, Mr Lamb, and it wins.confirmed by a letter from the company, which _ included the statement “Every facility will b© given to enable the accountant to check the values appearing in the various accounts.” That means only one thing. No prudent business man would consider buying an important concern with less information. Yet, for no apparent reaison, the company made a. complete “volt© face” and! refused to show anything but a. ledigpr. Why ? I am etc. . L. A. BONE, Chairman. Hawera, Aug. 10, 1928.

T)io., following -is the letter wirittom I by the company’s manager to the board embodying the company’s offer, and handed to u.s by Mr Bone: — -■ i ; Jime 16, 1928. The Secretary, South Taranaki Electric Power Hoard, Hawera. , Dear Sir, —I have been instructed by my executive to inform you that the board’s otter contained in your letter of the 29th ultimo was submitted on Wednesday last to the shareholders at an extraordinary general meeting of the company, when it was decided that the offer of the board could not he accepted. The whole question was carefully considered, and I have been instructed to submit to you the following three alternative proposals: 1. Th© company is willing to sell its undertaking, lands, corporeal and incorporeal rights, buildings, materials andi plant suitable to and used by tke~com- . pany lor the purposes of its undertaking (save as hereinafter excepted) as on 30 th June next at the price of ! £ 140,000, the board to take over the company’s stocks in hand as on the date of completion at a .price to be fixed by valuation; the company to retain all cash in hand or at the bank, book debts, investments, undistributed or accrued and undeclared profits; and any reserve funds; the board to undertake and fulfil any current and unexpired contracts entered into by the company and to indemnify the company against all actions, ‘proceedings, claims and demands in respect thereof. The company to discharge any debentures, mortgages, or charges on the company's undertaking or property. 2. The. company is willing to proceed immediately with the reticulation of those parts of the board’s area at present unwired on the conditions laid down in the Electric Power ■ Hoards Act, 1925, and to distribute power to consumers either as agents of the board or on its own account on such terms and conditions as may be agreed upon between the board and the company. 3. 'file company is willing to proceed immediately to have its selling price fixed by arbitration in accordance with the provisions of Section 16. of the Hawera County Electric Lighting Act, 1902. It is recognised that the board can only purchase the company’s undertaking if it obtains the necessary authorjtv’ and the monies required to be borrowed are authorised by a poll of the ratepa\ers in the district, and; consequently if the board decides to accept the com pan v’s first offer and requires the contract to be conditional on. the obtaining of such consents provision would have to he made in the contract for sale settling the terms on which the company would continue operations up to th© date when the hoard was in a position to complete.. Tliis le'tter is written entirely without prejudice to the company’s rights in the event of the matter proceeding to arbitration, and one or other of the offers must be accepted on or before noon on the 30th June next, otherwise they will be deemed to have lapsed.— Yours faithfully, Hawera County Electric Company, Ltd. , (Signed) P. W. Lamb, x Manager.