We weren't for sale: Hubbard

Dick Hubbard says the Rotorua trust deal makes sense for both parties. Photo / Richard Robinson

Dick Hubbard says he wasn't actively looking for a buyer for his cereal company, but having a charitable trust as a shareholder appealed.

The Rotorua Energy Charitable Trust has taken a 35.6 per cent stake in the previously wholly family-owned cereal manufacturer Hubbard Foods.

It was widely known that Hubbards was on the market around two years ago but the company had decided it wasn't appropriate to sell, Hubbard said.

It was then approached by the Rotorua trust and when it looked at the deal it made a lot of sense for both parties, he said.

"Charitable trusts have a certain degree of stability and longevity that's often not present with other shareholders."

The transaction gave Hubbards the ability to grow faster, and some of the funds would be used for property interests associated with that development.

Other than that it was business as usual.

"The day-to-day operations of Hubbards will remain under the current senior management team with no change of direction over the medium term."

The Rotorua trust was created to invest funds from the sale of the Rotorua Electricity Company.

It has investments worth $115 million and distributes $3 million to $5 million each year to the local community.

Chief executive Stuart Burns would not say what the Hubbards deal was worth, but said it fitted with the trust's aim to make more direct investments in the private sector.

It had been looking around for opportunities to invest in small and medium enterprises. It wanted established companies with sound management and good growth prospects, and the food sector had proved resilient. "Even in the current recessionary period it has been a sector that has been growing."