Myer in control of Grace Bros

Press, 29 June 1983, Page 21

Myer in control of Grace Bros

PA Melbourne Myer Emporium, Ltd, control of the Sydney-based retainer, Grace Bros, Ltd, has been strengthened by the surrender of rival bidder Bond Corporation, . Ltd. One of the more complex and torrid battles in Australian corporate history ended last night with the announcement by Myer’s corporate treasurer, John Barner, that Bond Corporation had sold its 38.3 per cent interest in Grace Bros to the take-over vehicle, Myer Retail Investments, Ltd. Mr Barner said the price was Myer’s cash alternative offer of 365 c a share, making a payout to Bond Corporation of about ?AustBo.2 million. Myer now held more than 98 per cent of Grace Bros and would extend its offer by one week, to July 4, to mop up the remainder, he said. Myer started on Monday with about 53.6 per cent of Grace Bros, but this rose to 60.1 per cent with the formal acceptance of the take-over offer by FAI Insurances, Ltd. From Perth, Bond Cor-

poration’s managing director, Peter Beckwith, said the Bond Group was very satisfied with the outcome of the take-over bid. “We recognised that the job of winning control of Grace Bros would be more difficult with a paper offer,” he said. “However, we believed that a paper bid was in the best interests of our shareholders and would ensure appropriate benefits arising from the successful acquisition of Grace Brothers and the resulting rationalisation of Grace interests with our existing Waltons Bond retailing interests. “We believed our bid would only be unsuccessful in the event of a substantial cash offer. “In the light of the market price for Grace of 265 c a share shortly before our announced intention to bid, we are very satisfied with the outcome,” he said. The group would suffer an extraordinary loss, given the issue price of preference capital for the acceptors of Bond’s bid. However, Mr Beckwith said the net outcome was most satisfactory and Waltons Bond would make a profit on its holding.

He said the Bond acceptance would give it large cash reserves. He looked forward to competing with Myer in the retail marketplace and trusted that Grace Bros would prosper under Myer’s management. A Myer executive said that Bond Corporation notified Myer of its acceptance only late on Monday afternoon, and the acceptance was then formally delivered to the Sydney repository, the accountants Arthur Andersen. Last week in the ACT Supreme Court Mr Justice Sheppard ordered Grace Bros to inform about 3500 shareholders of their right to reconsider acceptances of the Myer offer. The court’s ruling was that the Grace Bros response to the take-over offers recommending the Myer bid, which valued the company at about sAust2l2 million, contained misleading information. This concerned the question of tax on the redemption proceeds of the threeyear 450 c cumulative preference shares being offered by Bond Corporation, valuing Grace Bros nominally at about $6O million.