Richmond: PPCS out, raiders in

By PHILIPPA STEVENSON agricultural editor

South Island meat company PPCS has sold its major shareholding in North Island processor Richmond to an investment company of former Brierley Investments executives Paul Collins and Bruce Hancox.

The $29.3 million sale of 14.6 million shares - or 35.78 per cent of the Hawkes Bay-headquartered company - to Hawkes Bay Meat Ltd was completed yesterday, just in time to meet a legal deadline.

It means that Richmond's battling small farmer shareholders have successfully repelled the southern producer-owned co-operative only to find themselves bedmates with corporate raiders with a historic reputation for asset stripping.

A month ago, Richmond directors declared that PPCS' February 1999 share purchase from Richmond shareholder HKM Nominees breached the company's constitution. The companies were given 30 days to sell their shares.

The legal move was instigated by Richhold, the holding company formed to aggregate the shares of around 1700 small farmer shareholders and Richmond employees in an attempt to resist PPCS' takeover bid.

Yesterday, Richhold chairman James Aitken said only time would tell whether farmers had cast themselves from the frying pan into the fire. "We do not have an opinion on Hawkes Bay Meat other than that Paul Collins and Bruce Hancox have known management skills. What remains to be seen is what shareholding skills they have," he said.

PPCS chief executive Stewart Barnett said the company was disappointed to sell, but its actions were "not to be taken as a waiver of any of the rights PPCS believes it has in the manner the Richmond board handled the issue."

The company, which helped finance the deal, had no agreement to buy back shares should Hawkes Bay Meat wish to sell. A positive plan to benefit suppliers and shareholders of Richmond and PPCS had been lost, he said.

"We believe that there is benefit in the industry consolidating particularly under farmer ownership, [whether from] North or South Island. But here, because it was South Island, it tended to be the straw that broke the camel's back."

Mr Aitken said PPCS gave Richhold too little time to tender for the shares.

Paul Collins said Hawkes Bay Meat, owned by investment company Active Equities, was "delighted to have acquired the stake" in Richmond.

The around $2 price for the unlisted shares, which have traded around $1.65, was slightly above expectations, he said.

The former Brierley Investments chief executive said his involvement in the meat industry had extended over 20 years through various BIL investments.

"It's nothing new to me ... I was involved in the formation of Ravensdown Fertiliser in the late 1970s; so it's not just a passing interest or fad."