Silver lining to Dingwall offer

Press, 4 February 1986, Page 26

Silver lining to Dingwall offer

The original owners of Dingwall and Paulger, Ltd, the Christchurchbased food firm, have put some sugar in their offer to-buy back shares from the public. Their company, Orange Peel Investments, Ltd, is offering acceptors the opportunity to leave their money in the company, on call, at 18 per cent interest. Those who do will be given priority as investors if, in the future, a property-owning company is established within Dingwall and Paulger. Orange Peel is offering shareholders 310 c a share, compared with an offer by Brierley Investments, Ltd, of 325 c a share.

Money left on deposit by acceptors of the

Orange Peel offer will be covered by a first-ranking debenture over the company’s undertaking. Mr Morris Paulger, the chief executive of Dingwall and Paulger, says in a letter to shareholders that return on the capital re-invested at call will yield 18 per cent a year, compared with the present return on their investment of 6 per cent. “If at any time in the future a property-owning company within the Dingwall and Paulger, Ltd, group is established, investors with funds on deposit with this company will be given priority to Invest in that new company if they so wish,” Mr Paulger says.

The offers of debenturecovered investment and priority investment in any

property company are made separately from the formal legal take-over offer. Unlike the latter, they are fully addressed to individual shareholders (the legal offer is addressed “to all shareholders”).

Because of this it is likely that the debenture. and pro-perty-investment offer does not have to be made to ail shareholders.

The Orange Peel target is 80 per cent of the shareholding, but Mr Paulger said last evening the bidders would be happy with 66% per cent, and were moving steadily towards this.

Orange Peel’s parent firm, Southern Cross Holdings, Ltd, holds 50.14 per cent of the Dingwall and Paulger shares. The stated object has been to delist the company and preserve it as an entity. Mr Paulger said the debenture offer was not an afterthought. It had been considered before the bid was announced.