North stake thickens meat stew

By KEVIN TAYLOR and NZPA

A prominent sharebroker is questioning the motives of British meat baron Bernard Matthews in taking a 4.3 per cent stake in listed meat company Richmond.

The $4.5 million share deal by the Matthews-owned North Meats is the latest twist in a complex bid by South Island meat processor PPCS for Richmond.

Forsyth Barr Frater Williams executive director Don Turkington said it now appeared the PPCS takeover bid for Hawkes Bay-based Richmond would fail.

North Meats' purchase and a strategic stake bought just days ago by Hawkes Bay meat industry millionaire Graeme Lowe of 8 per cent effectively blocks PPCS reaching the 90 per cent shareholding threshold for a successful takeover.

In November the High Court demanded that PPCS make a successful takeover or lose all influence, criticising the co-operative for "gross commercial misconduct" during its struggle for control of Richmond.

North Meats paid $3.02 a share, 3c less than the PPCS takeover offer. The share price closed up 11c yesterday at $2.85.

Turkington said it had been no secret that Bernard Matthews was looking at acquisitions in New Zealand.

"What will be really interesting is to see whether they are prepared to buy more, because there's a heap of stock in the market, if they are interested, at $3 and less.

"The real test will be what they do. What are they doing there with 4 per cent?"

North Meats, which now holds nearly 1.5 million shares, unsuccessfully bid 18 months ago for a 34 per cent holding in Richmond that the farmer co-op later sold to Active Equities.

Richmond chairman Sam Robinson said he welcomed the interest in the company. He had not yet spoken to North Meats about its aims but would at some stage.

He said the move was a vote of confidence in the prospects and underlying value of Richmond.

PPCS said the takeover offer remained and was a chance for minority holders, who had not been in the buying loop so far, to decide whether $3.05 was a fair price.

"It represents a 35 per cent premium over the average weighted share price of $2.30 in the three months before Christmas, and shareholders will need to think about whether they will see Richmond shares at this level again," the company said.

North Meats bought half the shareholding of Waitotara Farmers Holding Company, 95 per cent owned by Richmond director Rod Pearce.

Waitotara Farmers held 2.97 million shares, nearly 8.6 per cent of the voting rights. The settlement date for the sale is the end of the month.

The deal will make Bernard Matthews the fifth-largest shareholder in Richmond behind Active Equities, PPCS, Waitotara and Lowe Corporation, which last week snapped up 3.78 million shares.

Meanwhile, PPCS's problems have been compounded by a small group of minority shareholders, headed by Napier solicitor Robin Bell, who will ask the Court of Appeal to rule on whether PPCS could remain on the Richmond share register with a non-voting stake if its takeover bid fails.

The Bell group initiated legal action last year over PPCS share purchases in Richmond.

Richmond expects a merit report on the PPCS offer to be in shareholders' hands in about 10 days.