Farmers begin 'friendly' takeover

HASTINGS - Richhold, the Hawkes Bay holding company set up to win farmer shareholders control of meat company Richmond, has served directors with notice of a "friendly" takeover.

The notice gives Richmond's board 15 working days to prepare for the takeover by farmers reclaiming producer control.

Richmond chief executive John Loughlin was trying to contact all directors for an urgent meeting to discuss the move.

Richhold already has the backing of 13.5 per cent of Richmond shareholders - just three days after going public with its bid to secure a big share block and shut out the "invading" South Island Primary Producers Cooperative Society (PPCS).

Fears of a PPCS takeover have been mounting since last August when the southern company gave notice that it wanted to buy 51 per cent of Richmond at between 90c and $2 a share.

PPCS now controls about 20 per cent of Richmond.

The latter has 1750 shareholders, most of them farmers, retired farmers or company employees. Only about a dozen have stakes bigger than 1 per cent.

To pull together these small parcels into a significant voting bloc, "Friends of Richmond" farmers James Aitken, Tom Crosse and John Cullwick formed Richhold and offered share-for-share swaps.

They want Richmond to pay good dividends to shareholders, good wages to employees and top prices to farmers.

The "notice and pause" gives Richhold the right to inform all shareholders of its intentions, including two large shareholder groups: Richmond employees, who own about 10 per cent, and the Waitotara Farmers' Holding Company, which holds a 9.3 per cent stake.

- NZPA