Pyne shareholders bleat while Kerr ups ante

While the loyal old shareholders of Pyne Gould Corporation were asking for explanations, George Kerr was quickening the pace of his takeover bid.

At the annual meeting in Christchurch yesterday a sceptical audience verging on hostile, questioned him about his motives and his right to remain on the board of the company he is taking over.

Earlier in the day Mr Kerr and his US takeover partners officially told Pyne Gould that the takeover offer would be sent to shareholders in the next few days.

Chairman, Bryan Mogridge, told the shareholders at the annual meeting that this had prompted the independent directors (himself and Bruce Irvine) to issue a don’t sell notice ahead of a takeover target statement and an independent report containing their views.

The directors faced tough questioning about the evaporation of shareholder wealth that has culminated in the 33c a share offer.

Director governance has become a major issue with shareholders challenging Messrs Mogridge and Irvine to resign from PGC spin-off Heartland and focus on the Pyne Gould job at hand. There was a call for Mr Kerr to resign from Pyne Gould.

Mr Mogridge announced his resignation from Heartland last Friday. Mr Irvine told the annual meeting he would resign as soon as a replacement was found.

But Mr Mogridge defended Mr Kerr’s place on the Pyne Gould board. He said there was no legal reason he should resign and he never took part in any discussions where there was a conflict of interest. At the same time, his expertise on a range of issues affecting the company was invaluable.

The annual meeting was the occasion for a show down between Mr Kerr and shareholder Reese Hart, former chairman of meat company Silver Fern Farms who has requested Mr Kerr step down from his board position.

Mr Kerr scoffed at the idea of separating his directorship from his shareholder interests.

“JP Morgan said bank it or own it, don’t stand in between.”

An uneasy Mr Kerr spoke from speech notes when he explained the background to the takeover. He said that when he saw predatory hedge funds come onto the share register he had to do something.

He repeated his arguments that Pyne Gould with it residue of toxic loans was best suited to investors with a 20 to 30 year long term view rather than people seeking regular dividends.

Pyne Gould assets need time and money to fix. It’s an investment for patient investors, he said.

The two main items of business were the re-election of Mr Irvine and managing director John Duncan, who also challenged in his role as an executive as well as a director.

A poll was taken and both men were re-elected by majorities of about two thirds each.

After the meeting a shareholder told NBR that they could hardly afford to do without the directors because they had all the information.