Talleys extends Affco bid as offer appears stalled

Fishing company Talleys has extended its takeover offer for meat processor Affco by 16 days as its partial bid, which was to have closed last Friday, appears stalled.

Talleys said today the 39c per share offer, aimed at taking its Affco stake to 50.01 per cent, would close on May 31.

According to the latest substantial shareholder notice, filed to the exchange on April 18, Talleys held 47 per cent.

Under the Securities Markets Act, companies with a stake of more than 5 per cent must notify the exchange of any changes in holding exceeding 1 per cent.

Talleys' silence since April 18 indicates the bid has stalled, despite the meat processor having reported a sharply lower half-year profit in the interim.

The 75 per cent profit fall to $3.6 million in the six months to March had been expected to play into the hands of Talleys.

"I expect that (the offer) has hit a bit of a brick wall," meat industry analyst and former Affco senior executive Allan Barber told the New Zealand Herald.

The problem may lie with the fact that Affco's directors were split on whether to accept Talleys' offer -- despite it being assessed as fair by an independent advisor's report.

The Deloitte report valued the company at between 35c and 45c per share and said the 39c/share offer was in the mid-point of the range and therefore fair.

Affco chairman Sam Lewis, who commissioned the report and planned to reject the offer, said the board had shied away from making a recommendation to shareholders given their differing views on whether to accept the offer.

Shares in Affco last traded on Friday at 39c.

- NZPA