Chairman of Eastern Equities, Peter Roebuck, today indicated the joint venture management buy out (MBO) would raise its
bid price from 62 cents to 70 cents a share.
Following the independent report by Grant Samuel who considered the offer to be fair, the bid has the support of Eastern
Equities independent directors who are recommending that shareholders accept the offer. The independent directors have
confirmed that they intend to sell their share holdings into the takeover offer.
Last month Mr Roebuck, and Eastern Equities chief executive Murray Boyte, formed a joint venture with AMP Asset
Management to bid for the shares of the listed Hawkes Bay transport contracting and horticultural company.
"Having considered the report commissioned by the independent directors, we are prepared to increase our bid to 70
cents. Although this is at the lower end of the report's fair value range, we feel the offer is generous," Mr Roebuck
said.
"We have a more pessimistic view of the likely returns from apples over the next few years. Using the report's
methodology, just a $1 reduction in the forecast price per carton reduces the company's fair value by almost eight cents
per share. This is worrying when viewed against past volatility in apple prices and the uncertainty associated with
industry deregulation."
"We also believe Eastern Equities needs significant capital expenditure over the next few years to consolidate and
expand its market presence."
"The uncertain fruit market together with the need for capital have a considerable impact on our assessment of the
company's value."
The increased bid represents a premium in excess of 50% of the weighted average share price (46.5 cents) in the period
between the last annual profit figures and the announcement of the bid. This bid will not be increased. A notice was
lodged with the New Zealand Stock Exchange, and the offer will be mailed to the company's shareholders today.
ENDS