French ready to take over electrical firm

By ELLEN READ

Control of Christchurch electronics manufacturer PDL Holdings is poised to fall into foreign hands.

French firm Schneider Electric has reached a conditional agreement to buy the Stewart family's 60 per cent stake.

But Schneider's offer of $12 a share for the roughly eight million shares involved hinges on acquiring an extra 2 per cent of PDL to lift its holding to 90 per cent. Schneider owns 28 per cent.

Reaching 90 per cent would allow Schneider to buy the rest of PDL under compulsory acquisition rules.

Schneider has set a June 29 deadline for settling the deal, which is still subject to legal formalities.

"After considerable soul-searching and consideration of all matters, we believe that the time is right for a transition in the overall control and ownership of the PDL Group," PDL chief executive Mark Stewart said.

"As a truly international company, our considerable talents can be developed and our products and solutions become recognised around the world.

"We are very aware that, unless we are aligned with a global player, this ambition will not be realised."

Mr Stewart said many people would be surprised the family had considered selling its PDL shares after 55 years with the company, but the family saw PDL as a logical fit within the Schneider Electric global business.

"Being part of the Schneider group will provide PDL with many new opportunities that would not otherwise be possible in this increasingly globalised world."



He said Schneider's executive vice-president, Jean-Louis Andreu, had assured the family that Schneider would continue to develop PDL and provide access for PDL's products to Schneider's extensive sales and distribution resources.

"Both PDL and Schneider have no interest in seeing any major disruption to the affairs of the company and, most importantly, with our customers," Mr Stewart said, adding that he would stay in his current position.

Schneider and Hong Kong's Gold Peak Industries have been in a race to build up their PDL stakes this year.

Gold Peak lags with about nine per cent.

But Gold Peak is being forced by the High Court to sell part of its holding - 2.1 per cent of PDL - after a complaint from Schneider about the way the shares were acquired in March.

Schneider is expected to chase this parcel to achieve its 90 per cent threshold.

JBWere is handling the sale by way of a contested tender. Bids close at 4 pm on Thursday, and the result is expected to be known immediately.

The overseas interest in PDL has boosted the company's shares from $3.70 early this year to a high of $10.50 at yesterday's close.

Last week, PDL posted a net profit for the year to March 31 of $2.32 million, well down on the previous year's $4.53 million.

The dip in profit followed company restructuring that will move a third of its New Zealand electrical products manufacturing business to China.

Schneider Electric is a global participant in the low and middle voltage electrical market, as well as in industrial controls and automation, with sales of €9.7 billion (NZ$19.6 billion).