Sweeter deal gives buyers bite of Enza

By GEOFF SENESCALL

Guinness Peat Group and FR Partners took a big bite of apple marketer Enza yesterday by swallowing the shares of a potential competitor.

After several days of negotiations, Timaru millionaire and major orchardist Allan Hubbard decided not to enter the battle for Enza. Instead, he and associated interests, including Grocorp Pacific and Hawkes Bay Apples, sold their joint 7.8 per cent shareholding, which had been the largest single block.

In levering the shares, GPG and FR Partners had to sweeten their offer by a further 15c a share to 165c. This price is also being offered to those who have already sold.

GPG's New Zealand boss, Tony Gibbs, applauded Mr Hubbard's commercial sense in selling. "He got himself a good deal and caused us to rethink our offer and raise the price for everyone."

Mr Gibbs said that there had been no obligation for GPG and FR Partners to offer the extra 15c to those who had already sold. "But it was the right thing to do."

The pair now have just over 11 per cent each and are therefore over halfway to their goal of 19.9 per cent apiece - the maximum shareholding any single grower can own.

Last night, John Stark, a partner in Timaru accounting firm Hubbard and Churcher, said he believed the new price was a fair one.

"In the circumstances, we weren't prepared to get involved in a bidding war," he said, speaking on behalf of Mr Hubbard. "We had to make a decision on what our strategy should be. Under the circumstance, when an increased offer price came along, we had to consider it."

Interests associated with Mr Hubbard also own 80 per cent of the listed company Grocorp.

Grant Sinclair, the chairman of the company, which owned just under half the shares sold, said: "We felt the commercial objectives of the company were certainly better served by us being a seller rather than looking to borrow a lot of money and get into some sort of bidding battle.

"Whereas the rest of rural New Zealand has been bubbling along, the apple industry has been dragging the chain a wee bit. We'd certainly like to see that change."

He welcomed the possibility of Enza being driven more by commercial factors than political ones.

GPG and FR Partners' increased offer appears to have burned other would-be bidders, at least for now.

Enza chairman John McCliskie, who last Friday told shareholders of the potential Hubbard bid, said he knew of no other bidders.

While he welcomed the increased price, he still believed the offer undervalued Enza.

He renewed the call for shareholders to hold fire until the independent valuation Enza had commissioned from appraisers Grant Samuel was out.

The GPG and FR Partners offer closes on August 4.