'Shareholders would be a pain', says boss

Electric fences to contain humans, as well as animals, are now a big part of Gallagher's business. Photo / Greg Bowker

Throughout Gallagher's long history, the company has remained privately owned.

Its directors are Sir William, his brother John, and deputy chief executive Steve Tucker, who manages the agricultural side of the business. Sir William and John each have a son in the firm.

Private ownership means there are no shareholders to distract him from his first priority - customers - says Sir William, or from staff, who are second in line for his attention.

In contrast, he sees Tru-Test, Gallagher's competitor in the agriculture market, being sidetracked by its shareholders. The irony is that Gallagher, with a 19.9 per cent stake, is the biggest of those shareholders.

Gallagher makes no secret of his ambition to acquire Tru-Test, but the "spoilsport" Commerce Commission has foiled his attempts because of likely reduced competition in the electric fence market.

The two companies are robust competitors: last year Tru-Test opposed a Gallagher patent application for a weighing platform, as the two companies vie to expand their agriculture businesses.

Tru-Test turned down an interview request, saying it "didn't comment on our competitors".

Sir William, at 71, says he isn't ready to hand over the Gallagher reins. Presuming he does so in the next five to 10 years, he would like to think it will have grown into a $500 million business.

"I think that's realistic," he says, pointing out that there's plenty of the planet still waiting to be electrically fenced.

Despite his view that "shareholders would be a pain", Sir William says that when he retires or "drops dead", taking the company public "might be one of the exit routes of my descendants".

If that's the company's fate, it will be following a "fad" that has seen a string of family-owned New Zealand businesses cash-up, says Ian Hunter, a business historian and former associate professor at the University of Auckland Business School.

The justification is often given that an exchange listing enables faster growth, but Hunter says it doesn't necessarily work out that way, and the real reason for going public is to release family capital.

"It's a total fabrication that the share market is the route to fast growth and capital for New Zealand companies. It's one way; it's not the only way, and it's not in many cases the best way.

"What we've seen in New Zealand is many family firms have been doing exceedingly well for a number of decades without public capital and continue to do so."

Their ability to retain focus - not having to deliver short-term results that might be against a company's long-term interests - is ultimately better for New Zealand Inc, Hunter reckons.