The NZX looks set to have another bite taken out of it as potato products maker Mr Chips faces the prospect of a takeover.
Food manufacturer Simplot Australia intends to delist Mr Chips if its takeover offer is successful. Majority shareholder Sinclair Long Term Holdings, which owns 53per cent of the company, has indicated that it intends to accept the offer, subject to certain conditions being met.
Shares in the company have surged following a market announcement on Thursday advising shareholders to hold on to their shares. They closed yesterday at $2.15, up 15c.
Mr Chips chairman Graeme Edwards said the offer represented a "substantial premium" over the company's share price.
"I don't have an absolute price but it's significantly in excess of $1.90 and the agreement was sufficiently close that in the directors' judgment, we needed to warn the market."
Simplot has an ongoing supply arrangement with Mr Chips, while Sinclair Holdings has indicated in the past that it wished to exit the business.
"I'm not exactly sure who's made the first move."
Edwards said the final price would depend on the company's March accounts, which were being finalised. Simplot Australia is a wholly owned subsidiary of the J R Simplot Company, a privately held food and agribusiness corporation based in Boise, Idaho.
The Australian subsidiary owns some of Australia's best known food brands, including Birds Eye and Leggo's. Simplot intends to expand the Mr Chips business with current management and some potato growers.
