Brierleys

"Gibbs advised the board to announce to shareholders that they did not recommend the Brierleys bid and that the company would make a major announcement very soon concerning the value of the business. That stopped the bid in its tracks. Within a few days, after regearing the balance sheet, Gibbs had LWR announce a substantial return of capital to shareholders and a massive increase in dividends. The share price immediately jumped well above the Brierleys bid. It was fast and easy money for Gibbs, exactly how he preferred it — nothing that couldn’t be worked out on one side of an A4 sheet of paper. Though they weren’t thinking about it in those terms, Gibbs and his contemporaries were jolting tired and inefficient companies into the modern world."

"*The board were like stunned mullets. They couldn’t work out how these guys had paid cash for half the company with no visible means of support and had bought out the main shareholders. They couldn’t see the value that we’d seen; they hadn’t thought the company was cheap. All they could say was, ‘What will you do about the other shareholders?’ My game here was to say, ‘Well, sorry we don’t have enough money to buy the others, it was a huge deal scrambling to borrow $55 million to buy half the company.’ ‘Isn’t there something you could do?’ Pettigrew asked. ‘Goodness me,’ I said, ‘that’s a big ask.’ Until then they’d treated me like scum, especially Pettigrew.* *This was quite fun. The truth of it was that anyone who knew anything would have known that we needed to get the rest. It was a perfect case for someone like Brierleys to step in and get the 10 per cent needed to frustrate us. We were terribly vulnerable and might have lost much of our profit. I said, ‘OK, I’ll try to persuade the banks to give us the rest, but only if you, the board, recommend to shareholders to sell at the 25 per cent premium.’ They said, ‘Hell yes, do you think you might? That would be fantastic.’ If the other directors had said we were not paying a fair price, we were stuffed. But all those top directors thought our price a generous one.*"

"But if that wasn’t enough, 1990 had also brought Gibbs another wonderful business opportunity. Earlier in the year he’d taken a call from Craig Heatley inviting him and Trevor Farmer to invest in Sky Television, his latest business venture. Heatley, 34, had been one of the stars of the 1980s, having started out with a mini-golf course on Tamaki Drive. By 1987 his public company, Rainbow Corp, controlled 55 per cent of New Zealand’s supermarket trade through Progressive Enterprises, 20 per cent of Woolworths in Australia and significant property investments. Cannily he’d sold the business to Brierleys a few months before the stock market crash of October 1987.[28](private://read/01jrsfvkjy84rkprtbz9amfvj8/#rw-num-note-477273-050103421-28) Casting about for something to do in 1988, he started talking to someone who had a horse racing television channel in Australia called Sky. At that time, he was on Brierley’s board and they owned Dominion Breweries. He came up with the idea of having a horse racing channel exclusively in DB pubs. When his Brierley colleagues passed on the opportunity, he followed it up personally."