THE Jardine Matheson 51% owned Dairy Farm International has decided,
with the consent of Kwik Save, to tear up the standstill agreement which
limited the multi-national retailer to not more
than 30% of the British supermarket group's shares, writes ANDREW
WILSON.
However, it said it intended to remain a long-term and supportive
minority shareholder and had no present intention of making an offer.
Dairy Farm acquired a 25% stake in September 1987 at a price of 450p
through a public tender. Subsequent market purchases raised that to
29.4% which, with Kwik Save shares at 604p yesterday, is now worth #275m
with a paper profit of around #60m.
A standstill agreement was signed in November 1987 under which the
share restriction was agreed and Dairy Farm allowed board
representation. In practice, it has supplied the chief executives
throughout the period, first Graeme Seabrook and for the last 15 months
Graeme Bowler.
Kwik Save was anxious for such an agreement as it did not know Dairy
Farm very well and wanted some comfort as to its future intentions. A
spokesman said yesterday that the agreement had served its purpose.
In any case, Dairy Farm was entitled to cancel the agreement
unilaterally.
Dairy Farm has interests in China, Hong Kong, Taiwan, Thailand,
Australasia and Spain as well as the holding in the 820 or so Kwik Save
stores.
It intends withdrawing its Hong Kong quotation next March.
*THE Jardine Matheson parent which is now domiciled in Bermuda
increased its half-time after-tax profits by 24% to $216m (#140m). That
reflected a strong performance by the Jardine Fleming financial services
division and a 53% leap at Dairy Farm to $102m (#66m).
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