New Adams bid gets shareholders' nod

By Geoff Seneescall

Ernest Adams' three major shareholders intend to accept Goodman Fielder's sweetened offer as soon as it is lodged.

Yesterday Goodman added $825,000 to its $37.95 million takeover bid - taking the offer price from 230c a share to 235c a share - to bring it to the bottom end of the independent valuation range.

A formal offer, conditional on at least 90 per cent, will be sent to shareholders on Monday and will be open for one month.

Goodman said that it raised the offer to within the range of the independent appraisal report to facilitate a speedy conclusion to the process.

The chairman of Ernest Adams, Michael O'Neill, who is opposed to the bid, will respond today to the revised offer.

But indications from related sources suggest that Mr O'Neill does not support the higher offer, which is at the bottom of the 235c - 265c independent valuation range.

However, the three institutional shareholders, Tower Corporation (controlling 60 per cent), BT Funds Management (12 per cent) and Spicers (8 per cent) all told the Business Herald yesterday they would sell at the earliest possible time.

Tower commented that there were major risks attached to the company's earnings forecast for the year ended March 31, 2000, particularly in light of the company's track record of under performance relative to budget.

One analyst said that because Goodman had done extensive due diligence on Ernest Adams, if the deal fell over it would be a very powerful competitor.