Enza independent directors recommend GPG takeover offer

2.25pm

Enza said today that its independent directors had recommended Guinness Peat Group's $57 million takeover for the apple exporter.

"The bid is within the $1.17-$1.50 range of the independent appraisal, albeit at the lower end, so we are recommending to shareholders that they accept the offer," Enza deputy chairman Brian D'Arth told NZPA.

He chairs a committee of the three independent directors.

The Sir Ron Brierley investment vehicle, which already holds 20 per cent of the $600 million former monopoly marketer, sent a $1.20 a share offer to all Enza's 1065 or so grower shareholders on Friday.

Mr D'Arth said Enza's shares had never traded above $1.20 any time and for the last month anyone had been free to purchase the shares at above the bid price.

"We felt the offer, albeit lower than we would have liked, was a fair offer. No other bidder surfaced so we had nobody else to come in to make a counter bid."

"I wouldn't say we are over the moon about it, but at the end of the day we felt if shareholders wanted to realise their stake in Enza that this was an opportunity that was not liable to come up again."

The independent directors also based their recommendation on the fact that the bid was liable to be successful. GPG only needed a further 10.5 per cent to reach the 50 per cent threshold to acquire FR Partners' stake.

Fellow corporate investor FR Partners had already agreed to sell its 20 per cent stake to GPG if the bid reached the 50 per cent threshold.

"As independent shareholders, we were convinced that that would be achieved, so the recommendation is that 'if you want to realise your stake in Enza, now is the time to do it'," Mr D'Arth said.

Mr D'Arth said he himself would sell just over half of his holding, held through Tollemache Orchards Ltd, a family concern.

He did not expect GPG to complete a full takeover, ending with a stake somewhere between 50 and 90 per cent of the company.

A report on the offer's merits by corporate restructurers and consultants Ferrier Hodgson should be received by growers today.

In a covering letter to shareholders with Friday's offer, GPG director Tony Gibbs said the company believed Enza was best served by having a committed shareholder.

"GPG has a long-term strategic vision for Enza which includes better returns for growers through business efficiencies."

The offer price was 114 per cent higher than Enza's share price before the marketers' February annual meeting, Mr Gibbs said.

GPG and FR got their stakes in Enza in 2000 after meeting the grower qualification, which applied at that time for shareholders, by leasing orchards. The move prompted the deregulation of Enza, formerly the Apple and Pear Marketing Board.

Mr Gibbs was deposed as Enza chairman last August by FR director Bill Birnie and failed to regain the role at February's annual meeting.

After the takeover was announced last month, Mr Birnie said that following the AGM it was clear to all other shareholders that GPG and FR had different approaches to the Enza business.

"It is not in the best interest of the company, its staff or its suppliers that there are two hands on the tiller," he said. "We have reluctantly concluded that the best course for all parties is to accept the GPG offer."

Mr Gibbs said at the time GPG was not intent on owning 100 per cent of Enza but had bid for all the shares "in fairness to everybody".

GPG's offer values Enza at around $72 million. In its latest annual report, the company's net shareholder value was $77 million, and its gross operating revenue $640 million.

- NZPA