By LIAM DANN
Billionaire Graeme Hart, who last week picked up a 10.3 per cent stake in Kapiti Cheeses, has jumped the gun on a formal tender process already initiated by the company.
Kapiti management has advised shareholders not to sell to Hart's New Zealand Dairy Foods (NZDF).
Chairman John Butterfield said
a number of prospective buyers were already carrying out due diligence on the award-winning cheese company.
NZDF had been invited to take part in the tender process but had declined, he said.
It had also indicated it was trying to further build its stake, independently of the tender process, Butterfield said.
The due diligence process was well advanced, he said, and it was likely the Kapiti board would be ready to make a recommendation to shareholders by the end of this month.
Over the past year Kapiti has been approached by several companies looking to buy it.
Management had made no decisions about selling but sought professional advice on how to handle the situation.
"We decided to test the market by running a disciplined tender process," Butterfield said. "This may result in an offer that the board can recommend to all shareholders.
"We believe it is in all shareholders' interest that they await the outcome of the tender process in order to have the best chance of maximising value."
Kapiti Cheeses has about 160 shareholders, including private equity investor Rangatira, which holds a cornerstone 40 per cent stake.
Its shares had recently traded on the unlisted market in the range of $4.65 to $5, Butterfield said.
NZDF said it paid $3.75 a share for 273,648 shares - a total price of $1.03 million. "NZ Dairy Foods considers the investment strategic and core to their long-term interests in this industry," the company said.
Hart - whose Rank group bought NZDF in April last year for $245 million - was unavailable for comment yesterday.
Burns Philp, in which Rank Group is a major shareholder, bought Australian food giant Goodman Fielder this year.
Butterfield said he would not speculate on NZDF's motivation but it was important that shareholders knew what was going on.
