Richmond falls to PPCS

By LIAM DANN, primary industries editor

PPCS looks to have won its long running battle for control of New Zealand's largest meat processor, Richmond.

A Court of Appeal decision yesterday left South Island co-operative PPCS with a 62.94 per cent stake in Hawkes Bay-based Richmond.

The decision brings to an end a drawn out corporate conflict - dating back to 1996.

Richmond has 21 days to decide if it will appeal to the Privy Council but is understood to have little enthusiasm for further litigation.

The court's decision overturned an earlier High Court ruling that PPCS should lose voting rights on a 35.78 per cent stake in Richmond because of a failure to properly disclose its interests in takeover dealings done in 1999.

The High Court had also ordered PPCS to forfeit a 16.76 per cent stake in Richmond.

In a judgment delivered by Justice John McGrath, the Appeal Court ruled that the forfeiture should remain but that it was a sufficient penalty.

"We regard the order which strips voting rights ... as excessive," the ruling said.

The judgment clears the way for PPCS to make another full takeover bid for Richmond, although it is unclear whether they will choose to do so. Trading in Richmond shares was suspended yesterday. They last traded at $3.15.

PPCS chief operating officer Keith Cooper said no decisions would be made until the board met on October 23.

During the appeal hearing in July, PPCS lawyer Alan Galbraith told the court that the co-operative would reopen its offer of $3.11 per share if its voting rights were returned.

That statement had been part of a proposed resolution, Cooper said yesterday.

As it was not mentioned in the judgment there was no obligation to follow up on it, he said.

Richmond would be allowed to retain its own identity. It was possible for it to remain a listed company and still fit with PPCS' strategy.

PPCS management would work to find synergies between the companies, particularly offshore.

Opportunities to find efficiencies through economies of scale would also be explored.

Richmond's new chief executive Richard Carver, appointed in May, looks likely to keep his job.

The position of Richmond chairman Sam Robinson, a long time opponent of the PPCS takeover, may be less secure. Cooper would not comment on possible changes to the Richmond board.

Robinson also declined to comment on his chances of keeping the job.

"I don't know," he said. "That's up to PPCS. They are the controlling shareholder and they'll make those decisions in due course."

The decision allowed Richmond to put behind it six years of uncertainty, Robinson said.

The new season started this week and it would be business as usual.

Meat New Zealand chairman Jeff Grant said he hoped all parties would put the past behind them. "The critical thing to remember is that the real competition is offshore."