Raider's 8pc stake stymies takeover

By PHILIPPA STEVENSON agriculture editor

Hawkes Bay meat industry millionaire Graeme Lowe has secured a strategic 8 per cent stake in Richmond - a move likely to block the takeover bid by the second-largest shareholder, PPCS.

Lowe's month-long purchase of Richmond stock hit high gear this week after PPCS, a South Island farmer co-operative, announced a takeover bid for its northern rival on Monday.

With money from last year's failed $35 million bid to buy Invercargill's Blue Sky Meats, Lowe spent about $9.8 million to get 3.2 million of Richmond's 40.9 million shares.

Richmond's stock traded around $2.40 a share before PPCS made its $3.05 a share offer. The stock went as high as $3.04 in the last two days but closed yesterday down 5c at $2.85 after Lowe filed a substantial security holder notice.

Taciturn Lowe, 68, was unavailable for comment again yesterday.

But sources said the man who developed more meat processing plants than any other - then sold them to Richmond - wanted to secure the supply of pelts and hides from the company which underpins his present business as the country's biggest leather processor.

A restraint of trade agreement signed with Richmond after he sold his last plants to it in 1998 allows Lowe to own up to 10 per cent of a North Island listed public meat company but not to own any other North Island meat plant assets.

Lowe's significant business with Richmond would be at risk if PPCS gained its target 90 per cent of the company. The southern co-operative is unlikely to want partners and could be expected to go for full ownership of the company.

One source said Lowe, a man dedicated to the Hawkes Bay, harboured no love for PPCS, whose attempts to take over Richmond have been staunchly resisted by the region's farmers.

PPCS' latest bid for Richmond follows a High Court judgment in November which condemned the co-operative for "gross commercial misconduct" for the way it gained its original shares in the Hawkes Bay company in 1998. The court demanded it make a successful 90 per cent takeover or lose all influence.

PPCS chief operating officer Keith Cooper said no discussions had been held with Lowe.

"We acknowledge he's got a shareholding there and that he's got a rationale behind it which we aren't aware of."

Richmond chairman Sam Robinson had also not spoken to Lowe yesterday but hoped to contact him within days. Directors aimed to have the merits report on PPCS' offer to shareholders in the next two weeks.

Lowe built a $50 million meat empire on an initial stake of £1000.

He emigrated to New Zealand in the early 1960s and initially worked as a purchasing officer for BirdsEye. In 1964, he bought a Hastings butcher's shop for £1000, and entered meat exporting after the two dominant Hawkes Bay freezing companies - the Vesty-owned Tomoana and the Hawkes Bay Farmers Meat Company's Whakatu works - refused to kill for him.

At one stage he owned or had interests in works in Hawera, Hastings, Dannevirke, Paeroa, Te Aroha and Dargaville.