Coats plans delisting, shareholders to vote at AGM

UPDATED: Coats to quit NZX and ASX as antipodean shareholdings dwindle

EARLIER: Thread maker Coats Group [NZX: COA] wants to delist from the NZX and ASX and consolidate share trading in London.

The company will seek shareholder approval for the move at its annual meeting scheduled next May.

Coats, which absorbed the shell of its parent Guinness Peat Group following that company's asset divestment process, announced the move in a notice to the London Stock Exchange (LSE) last night (NZT).

It said the decision reflected a "much reduced" shareholder base in New Zealand and in Australia and a desire to concentrate trading volumes on one market in the UK and thus help the stock to be included in top LSE indices.

The company also says the move will remove costs and complexities of its current tri-listing structure.

NBR understands the antipodean shareholder base has shrunk from about 55% to about 20% in the last two years.

New Zealand institutional shareholders now make up less than 5% of the New Zealand share register while GPG founder Sir Ron Brierley recently sold his 16.9 million remaining Coats shares.

Coats says both the NZX and ASX have approved the delisting requests, subject to conditions.

The resolution requires approval of 50% of votes cast at the AGM, which is set down for May 18. Further notices are expected this morning as to the options local shareholders may have. But if the resolution is approved the last day on which shareholders will be able to trade Coats shares on the NZX and on the ASX is expected to be 21 June 2016, Coats says.

Delisting from the NZX and ASX would herald a final chapter in the life of GPG and Sir Ron Brierley’s legacy in the New Zealand capital markets.

Following a watershed meeting in 2010, GPG sold down its portfolio of investments, leaving just the Coats threadmaking business, and renamed itself to reflect the change in business.

Sir Ron and his old team at GPG were divided over the strategy for the group, initially favouring a de-merger rather than a total wind-up. He left the Coats board in April.

Coats chairman Mike Clasper says Coats is now a UK headquartered, global industrial manufacturing business, having moved away from its New Zealand investment company past. 

"We have no material operations or executive directors in New Zealand or Australia and earlier this year Sir Ron Brierley ended his long association with the company by stepping down from the board and selling the majority of his shares.

"These changes have contributed to a significant shift in our shareholder register, with more than 65% of shareholders now UK based and less than 20% in New Zealand and Australia. For these reasons the board believes the benefits of moving to a single London listing outweigh those of remaining on the NZX and ASX."

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