Ron Brierley still selling out of GPG, rated 'outperform' by analysts

Thursday 20th December 2012

Guinness Peat Group founder Ron Brierley has sold another 5 million tranche of shares in the investment firm, even as it's rated an average 'outperform' by analysts.

The veteran corporate raider sold the shares yesterday at 47 Australian cents apiece for some A$2.35 million, or $2.95 million in New Zealand dollar terms, according to a statement lodged with the stock exchange. That leaves Brierley with some 31.9 million shares, or 2.01 percent, or GPG. Since embarking on his sell-down in October, Brierley has cashed up 20 million shares for some $11.73 million.

His exit comes with the stock rated an average 'outperform' based on six analyst recommendations compiled by Reuters, with a median target price of 65.5 cents - a premium of 13 percent to the current trading price of 58.5 cents on the NZX. The company is now in wind-down mode, with management looking to sell assets and rename it Coats, the company's biggest investment.

Brierley clung to his GPG seat at this year's annual meeting in Auckland, with just 12 million votes separating the 50.75 percent for and 49.25 percent against his re-election as a non-executive director.

He and his team at GPG were ousted last year in a shareholder revolt over plans to split up the investment company.

Since losing control of GPG's board, Brierley has set up another diversified investment vehicle, ASX-listed Mercantile Investments. He seized control of Mercantile, then called India Equities Fund, in January when shareholders agreed to a deal giving him 54 percent of the company and its chair in return for his stakes in Copper Strike, Trinity Group, ING Community Living Group, Australian Pharmaceutical Industries and Trojan Equity.

He subsequently brought in his old comrades Ron Langley and Gary Weiss via an A$2 million placement.

Mercantile is at least the third diversified investment vehicle for Brierley, who built GPG after being forced out of Brierley Investments in the early 1990s. The empire named for him had struggled to recover from the 1987 sharemarket crash and now exists as GuocoLeisure, with its primary listing on the Singapore stock exchange.

Last year, the 74-year-old investor told the Sydney Morning Herald he doesn't plan to quit the corporate world any time soon, though the new fund won't be anything "too big" or "too ambitious."

Brierley has also reconnected with old colleagues in New Zealand where he emerged as a co-investor with Selwyn Cushing, a former Brierley Investment chairman, in Wellington's struggling upscale department store and property owner Kirkcaldie & Stains.

BusinessDesk.co.nz

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