Richmond directors recommend takeover offer

A majority of Richmond directors have recommended acceptance of PPCS's unsolicited takeover offer of $3.05 a share.

In a statement to the Stock Exchange and shareholders today Richmond chairman Sam Robinson, who did not support the recommendation, said that while the offer price was at the lower end of the value determined in an independent report by financial consultants Ferrier Hodgson, it represented a premium over pre-offer trading.

Ferrier Hodgson valued Richmond shares in a range of $3 to $3.67 and on Friday Richmond shares last changed hands at $2.85.

Mr Robinson said directors pointed out that the offer process provided the opportunity for any alternative bidder to out bid PPCS should they wish to do so.

Should, the PPCS offer, or any alternative greater offer, fail, the directors did not foresee the share price reaching the offer price under normal trading conditions for some time.

Because of the litigation and the pending appeals, the offer had a number of complicating factors.

Meanwhile, the Takeovers Panel will meet on Thursday to decide whether the PPCS takeover for Richmond breaches takeover rules.

Richmond independent directors have asked the panel to investigate if PPCS had breached the code by excluding holders of Richmond convertible notes, and by not having to meet the code's 90 per cent minimum acceptance condition.

PPCS received High Court confirmation that it did not have to attain acceptances from at least 90 per cent of Richmond shareholders to proceed with the takeover offer.

PPCS mailed its takeover offer to shareholders late last week and the offer closes on February 26.

- HAWKE'S BAY TODAY