Breakfast surprise may knock PDL off board

Friday 16th February 2001

By Chris Hutching

The future of Christchurch-based PDL Holdings as a listed company was on the line yesterday as long-term shareholders bailed out, taking up a $5.20 per share offer from French-based Schneider Electric Industries.

Schneider has already picked up a 15% shareholding and has extended the offer with the stated aim of reaching 19.9%. The prevailing share price before the bid was considerably lower at $3.90, probably because of limited trading opportunities.

A company must have at least 500 shareholders holding no less than 25% of the company to remain listed - and PDL managing director Mark Stewart acknowledged its shareholder numbers were near that level.

"A main issue is how many shareholders remain on the register. I think it has to be 500 so this is a moving feast.

"It may be an issue that will be a matter for the directors to sort out with the Stock Exchange," Mr Stewart said.

The Stewart family still holds a 60% stake.

A share analyst said it was reasonable to assume the Stewart family might finally be prepared to share control of the company, with a view to a long-term exit but the current offer price would be insufficient to tempt family members who might contemplate selling.

Founder and president Sir Robertson Stewart (86) and his wife, Lady Adrienne, hold most of the family's stake, with a smaller parcel held by son Robert.

The bid came out of the blue on Monday morning. The first Robert Stewart knew of it was when he received a phone call while eating his cornflakes at his Queenstown holiday home and was asked by a long-term shareholder if he should sell.

Meanwhile, Mark Stewart said there had been commercial discussions in the past with Schneider, which has an outlet in Auckland, but the bid came without warning.

"The company has been undervalued for a long time. At last someone is seeing the value so that must be good and if we can't exploit some commercial arrangements out of this then we never will," Mark Stewart said. PDL, with its technology products, could benefit from the distribution network of Schneider and there would be other synergies.

The company reported a 5% rise in after-tax profit to $3.2 million for the six months to September 30. Third-quarter sales to the end of December totalled $84.6 million, down from $88.5 million last year.

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