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GWR of the UK buys Independent Broadcasting Group from Brierleys GWR Group Plc, a listed company of the U.K., and its subsidiary, GWR (West) Ltd, have approval to buy the Independent Broadcasting “Group” (IBC) from Brierley Investments Ltd for “approximately $25 million” (media reports put the actual price at $26.5 million). IBC (now known as Prospect) is the main rival of the recently privatised Radio New Zealand commercial radio network. GWR was an unsuccessful bidder (in partnership with the Maori Development Corporation) for the Radio New Zealand commercial network, having bid up to $85.8 million for 75% according to an announcement it made on the London Stock Exchange. If it had won the bid, the Commerce Commission would have forced it to sell some of its Prospect stations. In the end, a consortium led by Tony O’Neill, his company, Wilson and Horton, and U.S. Clear Channel Communications, won the big prize for $89 million, but have to wait for a court challenge by Maori groups. Prospect owns three companies that supply other broadcasters, including the Independent Radio News and sports service, and five further companies including Primedia Auckland which runs seven radio stations in that area including Hauraki, 198 and The Breeze. It owns a total of twelve stations. GWR is on an aggressive expansion path, having recently bought East Anglian Radio, which owns five licences north-east of London, for £24.3 million. GWR, “one of Britain’s leading commercial radio groups” had 28 licences before the purchase with “a listenership just under the total population of New Zealand”. It has recently acquired Chilton Radio, 31% of London News Radio Ltd (other shareholders being Reuters and Independent Television News), and minority holdings in western and eastern Europe including 48% of FM Plus in Sofia, Bulgaria. It is working with the BBC World Service and four Polish media groups to establish Inforadio in Warsaw to supply news and information to other Polish radio stations. (Ref: Press, 22/2/96, “British stations tipped to buy BIL radio stake”, p.32; 24/2/96, “RNZ bid clear”, p.27; 5/3/96, “Brierley sells radio company”, p.37; 6/3/96, “More time for GWR radio bid”, p.30; Listener, 9/3/96, “Going once, going twice …”, p.24-25; Press, 22/3/96, “GWR cleared for radio takeover”, p.5; 25/3/96, “British company bidding for Radio NZ”, p.36; 26/3/96, “Maori group, GWR linked in RNZ bid”, p.32; Listener, 27/4/96, “Maori fight radio sale”, Gordon Campbell, p.20.) Unilever buys Helene Curtis; may close Christchurch plant The giant U.K./Dutch firm, Unilever has bought out the Chicago-based shampoo and cosmetics manufacturer, Helene Curtis Industries Inc for $US770 million ($NZ1.14 billion) from the Gidwitz family. Helene Curtis has a factory in Christchurch which employs about 80 people and which may close as result. The purchase of the Aotearoa operation, Helene Curtis (New Zealand) Ltd, cost Unilever $9,000,000 according to the OIC. However Unilever subsidiary, Lever Rexona, has a factory in Lower Hutt, which is “looking at how to absorb the Christchurch factory”. According to Lever Rexona’s technical director, it was possible the Christchurch factory would close because most of the products made at Christchurch were destined for Australia and Lever Rexona had factories in both Sydney and Petone with spare capacity. “Because the majority of the production of the Christchurch plant is, in fact, destined for the Australian market it would seem logical that the Australian factory manufacture the products required for Helene Curtis.” The Christchurch factory was founded by Spencer Ayrey who began making Helene Curtis products under licence at another Christchurch location. It moved to the current Main North Road site in 1971 and was bought out by Helene Curtis in 1985. Products include Finesse, Salon Selectives, soaps and cosmetics. Unilever’s cosmetic products include Elizabeth Arden, Ponds, and Calvin Klein Cosmetics. (Press, 16/2/96, “Helen Curtis sale to Unilever given approval”, p.18; 31/5/96, “Take-over may shut Chch plant”, p.2.) Sovereign Assurance buys FAI Metropolitan Life Sovereign Assurance Company Ltd, a New Zealand public company which is owned “approximately 37.5% by various overseas individuals”, has approval to buy FAI Holdings New Zealand Ltd, a subsidiary of FAI Insurances Ltd of Australia. The price is given as $110,000,000, although news reports put it at $123,000,000. Some redundancies would occur due to combining their administration at Takapuna. FAI owns Metropolitan Life (though the OIC doesn’t mention it), and Sovereign and FAI/Metropolitan were ranked 10th and 11th among life insurance companies (by annual premiums in force) at the end of 1994 (Independent, 8/3/96, “Life Insurance Top 20”, p.26). Combined, they are reported to be among the top three based on volume of “new individual regular premium business” but about 6th in the 1994 ranking. Metropolitan, which has over $220 million in funds under management and 3.6% of the Aotearoa life insurance market, also owns 38% of listed property investor Newmarket Property Trust. Its 29% owned rest home operator Metropolitan Lifecare has been in trouble with the Securities Commission which found shortcomings in a prospectus issued by it in 1994. It referred to “the inexperience of directors, their delay in warning investors of the likely prospectus shortfall, and the inadequacy of the company’s management and management information systems. Company advisers were also criticised.” The June 1994 prospectus had forecast an after-tax profit of $4.95 million for the year to December 1994 and $5.45 million for 1995, but only $2.18 million and $531,000 eventuated. The Stock Exchange was also criticised for accepting below standard documentation from MetLife. The prospectus was however not false or misleading. FAI also launched Aotearoa’s first public “master trust” (a sort of unit trust of unit trusts), the Myriad Master Trust, unsuccessfully, perhaps due to its Australian orientation and having “no less than six separate fees to inflict on its members”. (Press, “Sovereign to buy Met Life”, 16/3/96, p.27; 27/4/96, “MetLife will look into commission’s findings”, p.28; 29/4/96, “Master trusts yet to take hold in New Zealand”, p.34.) Blue Star Group Ltd, which is 51% owned by US Office Products Ltd of the U.S.A., has approval to buy U-Bix Business Machines Ltd for $27,933,050. U-Bix was 41.5% owned by Transmark Corporation Ltd, which in turn was owned 66.6% by Shriro Pacific Ltd of Hong Kong. For further details of Blue Star’s rampage through the office products market, see our commentary on February 1996 decisions. Transmark had taken over U-Bix as recently as July 1995. It was then owned 35% by Global Asset Management Inc of the U.S.A. and the price was said to be “$15,000,000 for 40%”. Both Transmark and U-Bix imported and distributed electronic products: U-Bix photocopiers and telephone equipment; Transmark consumer products such as toasters, TVs, home security systems, watches and cameras. Of the remaining shareholding in U-Bix, 29% was owned by Maori interests (Independent, 8/4/93, “The Renaissance of Maori Commerce?”, Rebecca MacFie). In August it was announced in the news media that Transmark had bought GAM’s shares and with an existing holding of 3% and 2% bought at the same time, had 40% of U-Bix. It paid $9.135 million for these shares (at 105 cents a share), so its total cost would have been well below what it told the OIC. This is probably explained by U-Bix’s plummeting share price which ranged from a high of 360 cents to a low of 85 cents during the period between November 1993 and August 1995. Shriro, which is owned by Mark Shriro who lives in Monaco, owns its stake in Transmark through subsidiary Siegen Investments. Transmark’s chairman, David Wilson, lives in Hong Kong. U-Bix was in some trouble after a fraud investigation and a loss of $7.6 million for the six months ended December 1995. It has 14 business centres around Aotearoa. (Press, 3/6/95, “Transmark stake”, p.28, Press, 15/8/95, “Transmark takes control of U-Bix”, p.32.) Wang U.S.A. and Blue Star both get approval to take over Wang New Zealand In two separate approvals, both originally suppressed and released only on appeal, Wang Laboratories Inc of the U.S.A. and Blue Star Group Ltd, which is 51% owned by U.S. Office Products Company of the U.S.A., both may buy further shares in Wang New Zealand Ltd, which was already 30% owned by Wang Laboratories and 24.99% by Blue Star. Wang Laboratories obtained approval to acquire a further 20% for an unstated sum. Blue Star got approval to acquire up to 100% for “up to $2.50 per share = $42,500,000“. Blue Star’s 24.99% holding was presumably a stepping stone to a full takeover, a proportion that could be obtained without requiring OIC approval. As this decision and others show, Blue Star has been particularly shy about allowing its takeovers to be made public by the OIC. See also our commentary on the February 1996 decisions. Leading computer software retailer, Essentially, sold to Spectrum of U.S.A. Essentially Group Ltd, an innovative group which grabbed a large share of the computer software (and more recently, hardware) market in Aotearoa, has been bought out by Software Spectrum Inc of the U.S.A. through its subsidiary Software Spectrum (NZ) Ltd. The price given by the OIC is $11,000,000, but news reports put it at $US14 million. Essentially undercut competitors through retailing at wholesale, and sometimes below wholesale, prices through phone and mail order channels. It has an annual turnover of $70 million and seven offices in Australasia. Software Spectrum was “one of the world’s largest software licensors, with annual revenues of $US400 million” before this purchase according to the Press. Direct marketing and retailing operation, Essentially Direct, will continue as a subsidiary, but Essentially Solutions which specialises in the corporate and government markets, has been renamed Software Spectrum New Zealand. The U.S. company sees the takeover as giving it “a foothold in the Asia-Pacific region… The new regional hub will be in Sydney, where Essentially has a branch.” Microsoft told Software Spectrum that Essentially were their strongest reseller in Aotearoa. (Press, 9/4/96, “Essentially bought”, p.33; 16/4/96, “Essentially bought as Asia foothold”, p.28.) This leaves the majority of the most successful of Aotearoa’s independent national computer hardware and software retailers in overseas hands. Competing with them are the local subsidiaries of the transnational manufacturing giants such as Microsoft, IBM, and Digital Equipment Corporation. There remain a myriad of (often short-lived) local one-shop operations struggling in this cut-throat market. The following national or near-national businesses were all originally locally owned, although Computerland was a franchise from the U.S.A.
In addition, the closely related office products market is now dominated by two overseas companies, US Office Products (see above) and Corporate Express (see our February 1996 commentary) along with Whitcoulls. Trans Tasman Properties buys Auckland Finance and Trade Centre Orion Properties Ltd, an “indirect” subsidiary of Trans Tasman Properties Ltd, has approval to acquire Auckland Finance and Trade Centre Ltd from Shinwa Real Estate Company of Japan for $80 million. The company owns the Finance Centre in Queen Street, Auckland, including 0.6965 hectares of land. Given that land was involved and was valued at more than $10 million, national interest criteria should apply but do not appear to have been considered by the OIC. Trans Tasman is 46.33% owned by SEA Holdings Ltd of Hong Kong and 15% owned by “various other overseas persons“. See our commentary on the OIC’s August 1995 decisions for further details. Aluminium business sold by Comalco and AHI to Fletchers, retaining land Comalco New Zealand Ltd (ultimately owned in the U.K.) and AHI Group Ltd, owned by Carter Holt Harvey Ltd, itself owned 51% by International Paper Products of the U.S.A., are selling a 50/50 joint venture aluminium powder-coating, extrusion and distribution business, Comalco-Carter Holt Harvey Aluminium, to Fletcher Challenge Ltd. Renamed to Fletcher Aluminium, it has a franchised sales and distribution network of 160 outlets. Its products are mainly windows and door frames, branded Fisher, Rylock, Vistalite and Nebulite, which have about 47% of the market. The price reported in the news was $69 million. Comalco had put its extrusion and distribution businesses up for sale throughout Australasia last year in order to concentrate on aluminium smelting. (Press, 23/3/96, “Fletcher buys CHH Comalco venture”, p.30.) Fletchers, though well over 25% overseas owned, has an exemption from requiring consents from the OIC, so the $69 million transaction did not need the OIC’s approval. The reason for the OIC’s involvement is that AHI is retaining four hectares of land used by the operation (which is adjacent to five hectares of land it also owns), because “Fletchers do not wish to make the capital expenditure involved in purchasing and continuing to own the land”. AHI has bought it back from Fletchers for an initially suppressed amount (revealed on appeal to be $7,000,000), and will lease it to Fletchers. Tranz Rail buys land from New Zealand Post for Southdown Freight Terminal Geothermal power station at Rotokawa for Power New Zealand Rotokawa Generation Ltd, a subsidiary of Power New Zealand Ltd, which in turn is 27% owned by Utilicorp United of the U.S.A. has approval to construct and operate a geothermal power station at Rotokawa near Taupo. The station will use “less than five hectares” of land which will be leased from Tauhara North Number Two Trust “as part of a joint venture” for a suppressed amount. The construction of the station will be by Ormat Industries Ltd of Israel. More land for mining at Waihi and Waitekauri Valley As happened last month, more land is being acquired for the Waihi Gold Mine in and around Waihi. The purchase of a further three blocks of residential land has been approved: 0.0506 hectares at 91 Seddon Street (the “old miner’s cottage” backing onto Martha Hill) for $100,000 from the Puhiti Trust; 0.1799 hectares in Morgan Street for $150,000; and 0.0569 hectares in Seddon St for $15,000. The purchases are all by Waihi Gold Company Nominees Ltd of Australia, which “holds rural and urban land in and around Waihi as trustee for the participants in the Waihi Gold Mining joint venture.” It is owned 28.35% each by Waihi Mines Ltd and Welcome Gold Mines Ltd, 27.84% by AUAG Resources Ltd, and 15.46% by Martha Mining Ltd. All of these companies are Australian owned except AUAG Resources, which is owned in Aotearoa.
In a separate decision, Coeur Gold New Zealand Ltd, a subsidiary of Coeur d’Alene Corporation of the U.S.A., has approval to buy 89 hectares in Waitekauri Valley for $275,000. “Coeur Gold undertakes a mining operation in the Waitekauri Valley in a joint venture with Viking Mining Company Ltd of New Zealand. Coeur Gold state that the property is being acquired to enable the joint venture to further its mining activities.” Macraes buys 226 hectares more land for gold mining at Macraes Flat, Otago In a decision originally almost completely suppressed, Macraes Mining Company Ltd, which is listed in Aotearoa but is “approximately 39%” owned by Union Gold Mining NL of Australia, has approval to buy 226 hectares of land at Macraes Flat, Otago for $430,000 for extending its gold mine.
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