Long unwinding road for GPG

Ron Brierley. Photo / Greg Bowker

Guinness Peat Group will hold its first meeting in New Zealand today in what is likely to be a turning point for the investment holding company as it seeks to return capital to shareholders and eventually sell most of its Australasian businesses.

GPG has traditionally held its annual meeting in Britain, where its biggest asset - Coats - is based.

But after a shareholder revolt last year, one of the first things on the new board's agenda was relocating the meeting to New Zealand, where a significant proportion of the company's shareholders live.

Today's line-up will be minus two of the old guard who, over the last two decades, have become synonymous with GPG - Tony Gibbs, and the company's Australian connection, Gary Weiss.

Founder and former chairman Sir Ron Brierley is still on the board, and Blake Nixon, who was originally appointed to the board in 1990, is up for re-election.

Brierley had resisted holding the meeting here because of "practical economics".

"There was no legal reason. GPG is a UK incorporated company, its head office and administrative functions are in London and its AGM should sensibly be held at a nearby location," he is quoted as saying.

First on the order paper will be a meeting of shareholders to approve a return of capital of up to $158 million, which is not expected to meet much resistance, followed by the company's annual meeting.

The devolution of GPG will ultimately leave it owning just its British thread-making business Coats. GPG's assets in this country include a 35 per cent stake in insurance company Tower, a 65 per cent stake in fruit and produce company Turners and Growers and a 19.4 per cent stake in car auction company Turners Auctions.

Individual shareholders and institutions became concerned about GPG after it announced plans to split off its Australian business into a separately listed company last June.

Former director Gibbs, the only New Zealand-based director at the time, was removed from the board at the end of June after he spoke out against the plans.

BT Funds Management, which holds 38.5 million shares, is happy to see some changes occur at GPG, and the appreciation in its share price that has occurred since then. GPG's shares currently trade near the top of their 61c to 86c range over the last year. Shares closed yesterday at 84c.

"We were certainly keen to see some changes occur and have been delighted by the share price's subsequent performance since then," BT Funds Management portfolio manager Matthew Goodson said.

He expected to hear discussion about the changes that have taken place over the last few months.