Hill family's stake increase shelved

Michael Hill Photo / supplied

Michael Hill International said its founding family has abandoned plans to lift its stake in the jeweler to 50.1 per cent from 48 per cent after the Takeovers Panel indicated it wouldn't grant an exemption to takeover rules.

The Takeovers Panel said there were already ways for the Hill family to increase its stake under the Takeovers Code - making of a partial takeover offer to all shareholders or gaining shareholder approval to buy the requisite number of shares from named shareholders at stipulated prices.

"The company communicated these matters to the Hill family and the Hill family advised the company today that in light of the feedback from the Takeovers Panel executive they will not be seeking approval to increase their present holding at the forthcoming annual meeting," the retailer said in a statement today.

The Hill family holds its shares through a number of trusts and will still seek approval from shareholders to consolidate its interests into a single entity.

The shares last traded at 69 cents, valuing the company at about $264 million and the Hill family's interests at about $127 million.

The Hill family had planned to increase its voting control in the company by buying shares on market.