Disney Family Company Seeks to Manage Brierley
By Alan Wood
Dow Jones Newswires
577 words
13 October 1998
The Asian Wall Street Journal
6
(c) 1998 Dow Jones & Company, Inc.

WELLINGTON -- Directors of New Zealand diversified investor Brierley Investments Ltd. are to meet Thursday to discuss a surprise bid for management control of their troubled concern by a Californian company linked to the Disney entertainment family.

Brierley's chairman said in a statement Monday that the company's board had been holding discussions with Los Angeles-based Shamrock Holdings Ltd., which unveiled what it calls a "rescue package" for the troubled New Zealand company.

Shamrock said it is prepared to inject at least NZ$200 million (US$104.2 million) into Brierley, and has a target shareholding of about 20%. It currently holds 2% of Brierley's shares and is continuing to buy stock in the New Zealand company.

The cash injection would be used to fund a convertible-note issue, with a conversion price of 45 New Zealand cents a share. Brierley shares jumped three cents, or 8.3%, Monday to 39 cents, well above a low of 30 cents earlier this month.

In return, Shamrock wants two board seats, a management contract and options over 3% of the company. It wants its president, Stanley Gold, to become Brierley's new chief executive officer. Mr. Gold played a major role in the restructuring of Walt Disney Co. in 1984, Shamrock said.

Shamrock is a privately owned investment company of the family of Roy E. Disney, vice chairman of Walt Disney, and was founded in 1978. Its diversified investments include other U.S.-based companies with interests in supermarkets and making and distributing drugs and pet products. It also has investments in property and film-studio developments on the U.S. West Coast and other investments outside the U.S.

Mr. Gold admitted Shamrock needs to overcome resistance from some parts of Brierley to gain board approval for the proposal. The largest single shareholder, Camerlin Group Bhd., has lent its support, but other obstacles remain, including the existing chairman, Sir Roger Douglas, and founder Ron Brierley. So far, Mr. Gold said, Sir Roger has dodged attempts to discuss Shamrock's proposal.

Once a market favorite, Brierley has suffered over its exposure to problem assets and management's inability to develop workable solutions. The problems came to a head in April when Sir Roger, a director for 10 years, ordered a strategic review and the incumbent chairman and chief executive resigned.

The company has been led by Sir Roger and a management team since, and last month reported a NZ$1.2 billion write-down of asset values. The resulting full-year loss of NZ$904.3 million put Brierley in breach of its banking covenants, but its bankers still provide support as an asset-sales program progresses. To date, about NZ$900 million of asset sales or release of capital from subsidiaries has been achieved.

Camerlin's support for Shamrock and Sir Roger's reticence to discuss the proposal ahead of the meeting follow previous boardroom problems between Sir Roger and Camerlin.

Camerlin is a consortium under the loose control of Malaysian tycoon Quek Leng Chan and his Hong Leong group. Other investors in Camerlin include Salim Group of Indonesia, Singapore-listed Haw Par Corp. and SembCorp Industries of Singapore, formerly known as Sembawang Corp. It has two seats on the Brierley board.

In September Camerlin requested that Sir Roger step down following differences of opinion on Brierley's divestment strategy.