Collins Asset Management is ruling out a takeover play for juice company Charlie's, despite having spent about $1.1 million recently lifting its stake from 16.3 per cent to 19.9 per cent.
The private investment company's holding takes it to just under the threshold at which it must launch a general
offer, prompting speculation of a takeover.
But director Tim Cook said yesterday: "In our view, it's a long-term strategic stake - there is no takeover play."
Cook, who sits on the Charlie's board, said the company had good management, products and potential, making it well worth investing in for the future.
"So it is simply and genuinely just a long-term strategic investment in a good company with lots of potential."
Charlie's CEO, Stefan Lepionka, said yesterday that the extra Collins investment was a vote of confidence. "Nobody spends that sort of money without obviously believing in the story."
Lepionka and founder Marc Ellis will remain the next two biggest shareholders with about 16 per cent each.
Collins first became a substantial shareholder this year when it subscribed to a placement of shares made to complete the purchase of the Phoenix Organics group. It increased its holding in May before its most recent buys.
Companies Office records show Collins Asset Management's ultimate owners are Primecare founder Bev Collins - who sold Primecare's retirement village assets last year for $130 million - and Cook.
Charlie's shares closed yesterday up 0.2c at 11c.
Cook, meanwhile, said a recent global squeeze on juice concentrate prices did not play a part in Collins' decision to lift its Charlie's stake.
However, Lepionka believed that higher world concentrate prices - caused by a hurricane in Florida hitting citrus crops - would benefit Charlie's.
That was because the higher costs would force suppliers of concentrate-based drinks to lift prices towards the level charged for Charlie's pure squeezed juices.
Charlie's obtains juice from Australia and New Zealand, and he said the price for this product was not affected by the concentrate situation.
He had recently returned from overseas where the view was that concentrate prices would stay up for probably more than a year. "It's great for us."
