PPCS makes full Richmond bid

The lengthy and often acrimonious battle between Dunedin-based meat co-operative PPCS and its listed rival Richmond reached a decisive moment late yesterday as a full takeover offer was unveiled for the North Island company.

The offer from PPCS follows a High Court judgment in November demanding that PPCS make a successful takeover bid for 90 per cent of Richmond or lose all influence on the company it has fought since 1997 to control.

PPCS said it would offer $3.05 a share for the Richmond shares it does not already own, valuing the company at about $104 million. Richmond shares closed yesterday down 5c at $2.40.

Richmond chairman Sam Robinson said the offer was not unexpected.

"Our response will be guided by the Takeovers Code and the High Court judgment."

He said the company would commission a merits report and tell shareholders whether directors viewed the offer as fair.

PPCS owns 16.7 per cent of Richmond in its own right, but will own 52.5 per cent once a separate deal to buy Richmond shares held by Active Equities is completed by February 1.

PPCS is paying $3.50 a share for the Active Equities stake.

A High Court ruling on November 22 found PPCS twice in breach of the Securities Amendment Act as it accumulated a 52 per cent stake in Richmond.

The court ruled PPCS forfeit 6.7 million shares and lose its voting rights on the remainder.

The court left open to PPCS the options of appealing the decision, or launching a full takeover by January 24. It has already given notice of an appeal, in a belt-and-braces approach.

The new takeover offer follows informal talks between PPCS and Richmond independent directors before the court's ruling, in which PPCS is understood to have suggested an offer of $2.40 a share.

That suggestion was rejected by influential Richmond shareholders including former chief executive John Foster.

"Richmond has the potential to be an enormous company and to acquire its assets below their book value would be a bit of a steal," he said yesterday.

PPCS chairman Jim Pringle said the company's offer took into account the impact of the court's forfeiture order.

"The situation both Richmond and PPCS find themselves in is far from satisfactory," Pringle said. "We recognise and accept responsibility for our part in the events that have led to these circumstances."

PPCS chief operating officer Keith Cooper said Active Equities was receiving more per share because the transaction was entered into 18 months ago when the industry outlook was more positive.

"We have put aside other values and come up with a value which we believe is fair and a good price to minority shareholders."

Both companies were marketing organisations, he said, and had been working together well until the PPCS shareholding was challenged in court.

"We clearly believe we can deliver and are looking for an opportunity to prove ourselves," he said.

PPCS planned to open an office this month in Hastings, where Richmond is based, to house its "North Island operations".

Pringle said the company would use its new North Island presence to explain to farmers PPCS' co-operative ownership and philosophy.