Forum Archive Index - August 2003

["David & Jill Stevenson" <djstevo@quicksilver.net.nz>]

The most recent NTA for GPG was NZ $1-87 .This had recently been severely (20 cents) discounted with translation of a rising $NZ affect on Sterling and it`s affect in turn on the substantial GPG UK based portfolio.This  obviously fortuitous outcome should not be a negative in judging the GPG team. The great imponderable is GPG`s 64% interest in Coats plc via Avenue Aquisition plc.In it`s 12 year history it has not been so heavily committed to a holding in monetary terms.It`s investment in Tyndall pty ,which proved such a resounding success story,was the fruition  of several years of sound management and progressive acquisitions by Tyndall. That sale could not have been timed better in the light of subsequent downturn in the insurance and managed funds industry.. Perhaps analogous are  GPG  plans for Tower. Being unsuccessful in getting it`s planned initial 30% holding however may cause a rethink but I don`t doubt a good outcome even if watered down somewhat with Hanover Group displaying the merit of a  circling vulture while GPG do the hard yards in restoring value to that company for everyones benefit.... With Coats plc ,instinct tells me that this will prove quite a success story say 5 years out. I further sense that will be the swan song to mark a fitting occasion when Sir Ron Brierley will retire to be remembered by history primarily for the success story that was Coats plc.  I believe that the reason UK-based Director Blake Nixon  was so lavishly rewarded by the  GPG  Board a couple of years ago with Options and Bonus might have been primarily for his effort in recognising the restructured possibilities of Coats plc in the GPG stable.. Maybe I am wrong . I don`t think so. A Scottish Bank is heavily committed to the Coats takeover.They will have had the possibilities well explained.There is nothing to match a canny Scottish Bank.Even capital notes borrowing hints at a medium term finale.A glitch in that finale may be Dawson International plc.but on a minor scale.However it is always surprising what GPG recovers from the embers of a target company dissolution. Although at 13.5 p. at the moment the market does not share that view.But they have not been exposed to Sir Ron`s ability to rake the coals -also Coats itself may be a catalyst in determining Dawson`s future..I well remember GPG`s involvement in a company acquired ex Bond Corp. in Australia some years ago. Disaster after disaster emerged- enough to shake anyone`s nerves .Regardless, eventually there was maximum residual value achieved by GPG ,Even his old BIL benefited when it took over the Bass Strait Week`s oil royalty.So don`t underestimate GPG while Sir Ron is still around no matter how a naive (?) market perceives the situation. .

                                                                                                      David S.