Liam Dann: Gloves come off as break-up proposal unravels

Tony Gibbs. Photo / Greg Bowker

But what will Sir Ron think? Guinness Peat Group, the mark two version of the Brierley empire, is unravelling like a spool of thread at the company's Chinese cotton factory.

Well perhaps not quite that quickly and not quite that smoothly, either.

Tony Gibbs, the man who has - for New Zealand investors at least - been the public face of GPG, has taken the gloves off and stepped up for a public scrap with his fellow directors over the future of the company.

The proposal to split out a new company called GPG Australia, under the leadership of executive director Gary Weiss, always looked like a hard sell given investors have been expecting a capital return for some time.

Now, with Gibbs publicly rejecting it, it looks likely to fail. Surely the rest of the board knew this was coming - everyone else in the New Zealand market seemed to.

The fact that the Australian plan was not Gibbs' first choice wasn't hard to work out. Despite the official unanimity of the board, the enthusiasm for selling the deal was decidedly lacking on this side of the Tasman.

Weiss obviously knew that when he flew out of Sydney last week and hit town to do his own sales job around the Auckland institutions.

But despite all that, going public with his dissent must have been a tough call for Gibbs to make. He has worked with Brierley for more than 30 years and is an intensely loyal man .

There's no doubt Gibbs is a battler but he also follows his own personal code of ethics.

For him to maintain public support for this deal while privately bagging it was never going to be a path that he would take. In the end, he has had to make a choice between his colleagues on the board and the loyalty he feels he owes the local shareholders.

His decision will no doubt upset his fellow board members but it is one worthy of their respect. For shareholders, Gibbs' move effectively amounts to the addition of a fresh proposal to be put to the vote.

In the end it should always be up to shareholders to decide how best to wind up the company.

Brierley, although he still chairs the board, no longer dominates the GPG share register - his direct holding is listed as just 3.82 per cent, although he may hold more through various funds.

Broadly, though, the register is wide open. What isn't clear is how the power balance splits among New Zealand, Australian and other foreign shareholders, which may not matter now.

Gibbs' proposal is essentially the one the market has been wanting to hear. It would return them some cash and the business would be restructured around the most efficient sale of the struggling threads business Coats.

Based on the positive share price movement yesterday, Gibbs looks likely to have plenty of local support.

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