GPG shareholders told merger will bring long-term benefits

Sir Ron Brierley's Guinness Peat Group reportedly told its annual meeting last week that a proposed merger with a small British listed company would lead to long-term tax and other benefits.

The Sydney Morning Herald said today shareholders were told a possible scrip merger between GPG and the smaller company would involve an approximate 2 per cent dilution of existing GPG shareholders.

The transaction was necessarily complex and would take some months before it would "come together," he said.

Last month GPG filed a merger notice with the Office of Fair Trading after making a bid for retail motor trader Ryland Group. GPG first took a stake in Ryland in August 2000, with its offer valuing the group at $116.64 million.

The paper added that some investors were unhappy with GPG's performance, in particular the lack of dividends.

Sir Ron reportedly replied that "dividends, unfortunately, are a very uneconomic way of transferring benefits to shareholders," and that the best reward for shareholders remained that GPG became a prosperous company.

- NZPA