Meat wars: Richmond hits back

By JIM EAGLES business editor

South Island meat company PPCS has again run into problems trying to take over Hawkes Bay-based Richmond - this time for allegedly having inadvertently received price-sensitive information.

A subcommittee of Richmond's non-executive directors yesterday issued a notice requiring PPCS to observe a 15-day pause before following through with a restricted transfer notice announcing its intention of acquiring up to 60 per cent of Richmond.

The Richmond subcommittee is also advising shareholders in the company, which listed on the stock exchange in February, to be cautious in the meantime about selling their shares.

The Richmond notice and an explanatory letter were sent to the New Zealand Stock Exchange yesterday afternoon.

In response, PPCS announced late yesterday that it had also referred the matter to the exchange, seeking clarification.

Chief executive Stewart Barnett said the supposedly price-sensitive information had been sent to PPCS in an unsolicited letter from Richmond.

"Our view is that if this information is price-sensitive then the directors of Richmond should advise the market of what it is rather than wait 15 days."

When PPCS moved to take control of Richmond last year it was forced to sell a 36 per cent stake after Richmond directors ruled that the manner in which it acquired the shares had breached the company rules.

Those shares were sold to Active Equities, a company largely associated with former Brierley Investments executives, which is now seen as holding the key to the future of the company.

Last week PPCS moved again and built its stake in Richmond to 16.75 per cent, with the aid of a 10 per cent parcel from Peter Spencer, New Zealand's richest private farmer.

Earlier this week the southern raider issued a restricted transfer notice stating its intention to offer between $2.70 and $3.24 per share for up to 24.6 million Richmond shares.

That provoked an angry reaction from Richmond chairman Sam Robinson, who said it was in contrast to earlier assurances from PPCS, and would make future trust or co-operation difficult.

Next day Richmond set up a subcommittee of three non-executive directors, including Mr Robinson, to formulate a response.

The board noted that in the light of "the scrutiny past transactions of PPCS have been subject to with respect to Richmond shares" the highest standards of corporate governance would be observed.

Now the subcommittee has found that price-sensitive information not available to other shareholders was inadvertently conveyed to PPCS when it issued its notice.

"The subcommittee has determined that because PPCS had insider information, a pause of 15 working days (until June 13) is required with respect of its restricted transfer notice."

During the pause, Richmond will also discuss with PPCS "two minor matters of detail" relating to the notice which it expected to resolve before June 13.

The board of Richmond has also sought an independent appraisal report on the fair values of the shares.

It said the report would be in the hands of shareholders by June 13.

In the meantime, Active Equities said it was non-committal about the PPCS offer.

Chairman Bruce Hancox said the company was "aware of PPCS's interest but nothing has been decided."