PPCS woos Waitotara as it lifts Richmond stake to 30 per cent

By LIBBY MIDDLEBROOK

South Island meat processor PPCS could pick up another substantial chunk of Richmond shares next month after offering to buy Waitotara Holding Company's 9.3 per cent interest in the North Island meat business.

Dunedin-based PPCS wants to buy Waitotara's holding in Richmond for $1.65 per share, an offer that will be put to Waitotara shareholders at a special meeting on May 15.

PPCS, which said yesterday that it had built its Richmond stake to 30.04 per cent, has promised to restrict its over all holding in the North Island meat processor to 45 per cent if Waitotara shareholders accept the offer.

PPCS chief executive Stewart Barnett said by offering to restrict its Richmond holding, PPCS had demonstrated its willingness to influence rather than control.

``Our announcement in August last year to go up to 51 per cent of Richmond shares appears to have antagonised some people, which is why we're prepared to restrict our shareholders to 45 per cent as long as there is no material change in the shareholding [of Richmond].''

Richmond chairman Bob Croker, who declined to comment on the Waitotara bid, said he was ``delighted'' by PPCS's willingness to limit its shareholding to 45 per cent.

``It will get the argument out of the way. There are some local farmers who don't like the idea of them (PPCS) having 51 per cent -- I'm not too sure that they're delighted about them having any per cent.''

The battle for control of Richmond, the country's largest meat processor, has been running since PPCS told Richmond shareholders it wanted to buy up to 51 per cent of the company at prices between 90c and $2 per share.

In response, Richmond shareholders James Aitken, Tom Crosse and John Cullwick set up holding company Richhold to block out PPCS, offering Richmond shareholders a one-for-one share swap for up to 60 per cent of Richmond. The offer closes on May 22.

Earlier this month, the holding company also demanded a Richmond board inquiry into the way PPCS purchased its initial indirect shareholding in Richmond through Maori investment company HKM Nominees. However, Mr Croker said PPCS had complied with Richmond's constitution.

Meanwhile, Mr Barnett said he was confident that Waitotara shareholders would accept the $1.65 per share offer. PPCS told the stock exchange yesterday that it had bought a further 495,046 Richmond shares on the market at an average price of $1.47. A further 1840 shares had been bought for $1.45 each. ``The majority of the Waitotara Holding Company board members have recommended that their shareholders accept the offer, so we have the support of the majority of the board who believe that Richmond does require a stable shareholding for the company to get on and be profitable.''

Waitotara Holding Company director Rod Pearce declined to comment.