The June operating revenue of Michael Hill's company was up 7.6 per cent on the previous year. Photo / Janna Dixon
The Hill family plan to spend around $5.5 million increasing their stake in Michael Hill International to 50.1 per cent.
They currently own 48 per cent of the company.
Michael Hill International chief executive Mike Parsell told the Herald last night that there was no particular significance in the family's
plan.
"It's not signalling that they want to buy the company back or anything like that," he said. "From what I'm aware, they're just interested in a few shares in the business, but they can't do that without approval under the takeover process."
Wayne Butler, company secretary of Michael Hill International, said the planned share purchase would require "certain exemptions" from the Takeovers Code.
The Herald understands that if the necessary exemptions are obtained from the Takeovers Panel, the Hill family's planned share purchase will be decided in a vote at the company's annual shareholders meeting in November.
Butler said that if approval were gained, the family would increase their stake through buying shares on-market in a similar manner to a share buyback.
"If it becomes apparent that the exemptions cannot be obtained by the company in the necessary time frame for the matters to be considered at the annual meeting the company will make a further announcement," he said.
Parsell said a 50.1 per cent shareholding would "not necessarily" give the family more power in the event of a takeover bid by another entity.
"They still have a majority shareholding at 48 per cent in terms of voting on issues," he said.
Forsyth Barr analyst Guy Hallwright said he was unsure why the family were targeting a 50.1 per cent stake in the company. "Obviously it gives absolute control," he said.
Butler said the family also wanted to consolidate their shareholding in the firm into a single entity.
"Historically, the Hill family shareholding has been held in a number of different family trusts ... The Hill family advises that the reasons for doing so are no longer relevant and it considers that a single entity is now appropriate," he said.
The company recently announced an operating revenue of $433.3 million in the year to June 30, up 7.6 per cent on the comparative period.
Michael Hill International's share price closed up 3c at 68c last night.
