BIL alumni decide Richmond fate

By PAULA OLIVER

The future of meat company Richmond will be decided by a trio of former Brierley Investments executives, who could sell their crucial stake in the company as early as today - or hold out longer in the hope of more cash.

Hawkes Bay-based Richmond is at the centre of a takeover tussle between British meat magnate Bernard Matthews, and South Island cooperative PPCS.

Both parties want up to 60 per cent of the company, but their intentions hinge on the 36 per cent stake held by Active Equities - founded by former Brierley heads Bruce Hancox, Paul Collins and Patsy Reddy.

After receiving a clearance from the Stock Exchange on Wednesday, PPCS can start buying today.

It has previously said it has spoken to Richmond's major shareholders, and intends to reach its target off-market. Bernard Matthews, on the other hand, has to wait until June 6 before he can start buying.

Complicating the issue, and probably Active Equities' decision on who to sell to, is a persistent rumour that another player is also interested in entering the fray.

Bernard Matthews already operates a processing plant in Waipukurau under the banner Advanced Foods Ltd, and yesterday said it wanted Richmond because of growing demand for New Zealand lamb in the UK and European markets.

Spokesman Norman McRae said Bernard Matthews had the distribution network and brand to ensure good returns.

The company's focus on value-added products, such as boneless lamb roasts, is said to fit well with Richmond's strategy.

Richmond is also a supplier to the Bernard Matthews-owned Advanced Foods plant - a relationship some in the industry predict would hit shaky ground if PPCS gained control of Richmond.

Starting a war of words, PPCS yesterday attacked the foreign backing of the Bernard Matthews bid, saying overseas ownership of meat companies had not worked in the past.

Both parties are offering between $2.70 and $3.24 for the Richmond shares. If PPCS can secure the 36 per cent parcel from Active Equities, the takeover battle will effectively be over as it would then have 52 per cent.

But some industry observers doubt the former Brierley team will give up their stake so easily.

"I guess it's a case of whether they've still got the Brierley touch of maximising opportunities," one industry source said. "Why would they sell tomorrow when the battle only really begins next week?"

Active Equities already stands to make a healthy profit from the Richmond investment. It bought the shares for around $2.00 each, and is now staring at offers of between $2.70 and $3.24 - meaning it could pocket $18 million profit.

But Active Equities is rumoured to have told both parties it thinks a fairer value is more in the region of $5.00 a share - indicating it could hang on for a better price.

Richmond shares rose 25c to close at $3.10 yesterday.