Raiders go picking for shares in Enza

By GEOFF SENESCALL

Sir Ron Brierley's Guinness Peat Group (GPG) and FR Partners launched a joint raid on the freshly corporatised Enza yesterday in a bid to pluck a controlling stake from its owners - pipfruit growers.

Shareholders in the former Apple and Pear Marketing Board were being approached on behalf of the pair by brokers Forsyth Barr from 2 pm with a 150c-a-share offer. This was more than double the previous closing price.

The raiders - lured by Enza's pipfruit export monopoly - are bidding for 19.9 per cent apiece, the maximum any single holder is allowed under the company's constitution.

Each will pay up to $6 million for their respective holdings, under a first-come-first-served offer that is conditional on getting to 12 per cent.

Another shareholding restriction is that owners of Enza shares must be pipfruit growers. Both parties acknowledged recent purchases of apple interests in Hawkes Bay.

While GPG and FR Partners said they were acting in tandem, they said there was no cross financial ownership between them.

The ownership and shareholding constraints on Enza can be overturned with a 75 per cent vote.

The bid, which values Enza at $30 million, comes less than four months after the Government corporatised the board and distributed its 20 million shares among 1600 pipfruit growers.

Enza has yet to produce a set of financial accounts, but has indicated it will produce an operating profit of "some millions" for its financial year ending September. The result will be marred by a foreign exchange writedown and losses from an investment in a port facility in Napier.

Enza's chairman, John McCliskie, was in Europe as the bid was made but in a statement from the company he said the offer was a surprise.

"However, until we have met the parties concerned and considered the reasons behind the offers and their long-term intentions, it would be inappropriate for us to comment further."

The Minister of Agriculture, Jim Sutton, said of the raid: "The law allows for this so we shouldn't be entirely surprised."

Growers, who had endorsed the Government's restructuring, were slowly coming to grips with the offer.

Van Howard, a pipfruit grower and chairman of Independent Pipfruit Growers, used the bid to call again for the dismantling of the Enza export monopoly.

"For all our work we've done in this industry and put into this industry over 50 years of single-desk selling, if it is only worth $30 million it is a bit disappointing. The monopoly has run its course and the Government must do something about it," he said.

Mr Howard had no issue with the bid. He said GPG had bought into Turners & Growers and turned it around.

Phil Alison, chairman of Pipfruit Growers NZ, called on members to take a commonsense approach to the offer.

"The shares at last balance date had an asset backing of $5 each," he said. "It is early days yet."

But this was a positive step in recognising locked-up value.

GPG's New Zealand chief, Tony Gibbs, who has had an eye on Enza for more than 12 months, dismissed charges that the offer was opportunistic.

He said a premium was offered and he believed the move would be welcomed by the industry which had been calling out for a cornerstone shareholder. "We have been six years with Turners & Growers and have assisted that company in restructuring and becoming profitable.

"As a cornerstone shareholder in Enza we believe that our investment will be commercially sensible and add value for growers and shareholders alike."

FR Partners executive director Bill Birnie said the offer, if successful, would bring financial disciplines to Enza.

Mr Birnie and associates recently bought out the previous owners of FR Partners, who included Sir Michael Fay and David Richwhite.

Grocorp and associated interests, which last month bought out Eastern Equities' apple interests, hold nearly 8 per cent of Enza's shares. They have yet to decide what to do.