Stewarts cash in their PDL chips

Friday 22nd June 2001

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GIVING WAY TO SCHNEIDER: From left, Mark Stewart, Sir Robertson Stewart, Lady Adrienne Stewart and Robert Stewart

GOOD BUY: Sir Robertson Stewart bought PDL in 1947, developing a reputation for ruthlessness

By Chris Hutching

Everyone has their price and for the Christchurch-based Stewart family an offer of $12 a share for 60% of electronics manufacturer PDL from French company Schneider did the trick.

At that price the Stewart family will bank $97 million.

There was still some play left in the shares this week as sharebroker JB Were prepared to announce the results of a tender of shares formerly owned by Gold Peak Industries, a company associated with rival bidder Gold Peak Industries, which is ultimately owned by Singaporean Clipsal Industries.

Yesterday at press time Gold Peak agreed to sell its stake to Schneider. Schneider will have 88% of PDL's shares when it takes over the Stewart shareholding and it has said its bid is conditional on reaching 90%.

Gold Peak has another 7.2% not included in the tender and it could be a thorn in Schneider's side, although Gold Peak may not wish to be stuck as a long-term minority shareholder and will not want to overplay its hand.

A twist to the deal is that any surplus above the $6.45 level Gold Peak paid for the shares in March must go to PDL, according to the court ruling ordering the tender after complaints about the way the shares were acquired.

Aside from the potential for a last-minute hitch from the tender process, most analysts have accepted that Schneider is now the new force behind PDL.

Although PDL chief executive Mark Stewart, son of founder Sir Robertson, declined to confirm the extent of contacts with Schneider recently, it seems certain he was in talks when he visited France recently, leading to speculation that his restructuring moves announced a couple of weeks ago were part of the arrangement.

This will see a significant reduction in staff numbers in Christchurch as the production of some low technology is moved to a Chinese factory PDL has used in the past.

At this stage Mr Stewart, 36, is remaining as chief executive but for his family and some other members of the board the sale of the Stewart family shares is the end of an era in which PDL became part of the industrial fabric of Christchurch.

"There was an emotional wrench because PDL is all we know. It's what we've done for years - we're institutionalised, if you like," Mark Stewart said.

He said the Schneider takeover would ensure the growth of PDL with the benefit of enhanced international marketing links.

PDL's original name was Plastics and Diecasting and was set up about 60 years ago and bought by Sir Robertson in 1947. He developed a reputation for ruthlessness toward competitors and built up a large-scale plastics manufacturing business and moved into electrical appliances.

He became a captain of industry and led trade missions overseas at a time export subsidies were popular under former prime minister Sir Robert Muldoon. Companions speak fondly of the amusing times they enjoyed on those trips to London and Southeast Asia.

Sir Robertson has received accolades from various industry associations. He even commissioned journalist Don Grady to write a book about his career, which records his highs and lows while omitting some of the more colourful tales that abound in Christchurch business circles.

Since 1998 when Mark Stewart took over the reins, he has focused the business on developing the intellectual capital and research and development behind more sophisticated electronic products. He is the youngest of 86-year old Sir Robertson's four sons to second wife Lady Adrienne.

Another son, Todd, runs his own business. Sir Robertson's eldest son by his first marriage is Robert, who owns chiller cabinet manufacturer Skope Industries and owns about 10% of the shares, which should give him about $14 million from the takeover. Another son Peter is a deer farmer and his sister Lee Dunstan has a tourism business at Akaroa.

When Mark took over the helm a couple of years ago he made some brave profit forecasts but in hindsight they were a little bullish given subsequent difficulties encountered in subsidiaries in Australia.

Sir Robertson stepped back from the limelight for a slightly easier pace of life, although he still pops into the office frequently.

An attempted boardroom coup by three executive directors provided the opportunity for handing over the mantle to Mark. At that time the boardroom dispute was about whether the Stewart family should dilute its holding in the interests of share price liquidity and strength but there was no suitor like Schneider making an offer.

Sir Robertson and Lady Stewart live at the hillside suburb of Scarborough and they have a luxury apartment at Heatherlea, near Hagley Park, bought from the proceeds of a big payout in 1993 when an employee unit trust was wound up.

He was the beneficiary of about half the $20 million distribution. The latest deal ensures he will continue to enjoy his retirement in a manner to which he has become accustomed.

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