GPG shareholders greenlight $158m payout

Guinness Peat Group chairman Sir Ron Brierley. Photo / Greg Bowker

Shareholders in Guinness Peat Group (GPG) have voted in favour of the company returning up to £80 million ($NZ158 million) by way of a capital repayment and share cancellation in what is likely to be a first step along the way to the company devolving its holding company structure.

Today's "scheme" meeting, held just minutes before the annual meeting, voted in favour of the proposal. It now needs to be ratifed by this afternoon's annual meeting and the High Court. If these are forthcoming, the proposal is expected to become effective on July 5.

GPG has traditionally held its annual meeting in Britain, where its biggest asset - Coats - is based. But after a shareholder revolt and a lengthy campaign from the New Zealand Shareholders Association, one of the first things on the new board's agenda was relocating the meeting to New Zealand.

The board has been through a highly publicised shake-out, but two of the old guard remain - founder and former chairman Sir Ron Brierley, and Blake Nixon, who was originally appointed in 1990.

Nixon is up for re-election but the NZSA is opposing him.

"Mr Nixon is a former executive director and served on the old board during a long period of stagnation," the NZSA said in a statement. "He was involved in the increase to 100 per cent ownership of Coats which was not only a poor investment decision, but went well outside the original GPG statement of intent on which investors were entitled to rely," it said.

The devolution of GPG will ultimately leave it owning just its British thread-making business Coats. GPG's assets in this country include a 35 per cent stake in insurance company Tower, a 65 per cent stake in fruit and produce company Turners and Growers and a 19.4 per cent stake in car auction company Turners Auctions.

The holdings in Tower and both the Turners companies are not big enough to warrant shareholder approval for their disposal.

Individual shareholders and institutions became concerned about GPG after it announced plans to split off its Australian business into a separately listed company last June, which eventually led to pressure being placed on the board to radically change tack.

GPG's shares last traded at 84c, having gone through a 61c to 86c trading range over the last 52 weeks.