Mad Butcher chain sells for $8m
The Mad Butcher chain has been sold for $8 million to its chief executive, subject to shareholder approval.
Veritas Investments has announced it has entered a conditional agreement to sell the franchisor business and assets to Yogg Ltd.
That company is owned by interests associated with Michael Morton, Veritas’ largest shareholder and current chief executive of the Mad Butcher business, and his partner Julie Leitch, who is the daughter of the business’s founder, Sir Peter Leitch.
The Veritas board has been considering a number of initiatives and had been through a ‘‘strategic review process’’.
At the recent annual meeting, the company’s chairman was asked whether it was headed for liquidation.
ANZ indicated in August it was removing its support for the business.
There were three bids for the Mad Butcher business.
The sale price is less than a quarter of what Morton sold the business to Veritas for almost five years ago.
All of the Mad Butcher stores will be sold except for the company-owned Mad Butcher stores located at Henderson, Onehunga, Shirley and Silverdale.
The sale is subject to Veritas shareholders’ approval, which will be sought at a special shareholders’ meeting to be held in early 2018.
It makes The Better Bar Company the only business left within Veritas’ investment portfolio.
The $8m sale price of Mad Butcher makes up more than 50 per cent of the current ‘‘average market capitalisation’’ of Veritas.
Simmons Corporate Finance Ltd, a New Zealand specialist corporate finance advisory practice, has been engaged by the independent directors to prepare an appraisal report.
This report will contain information and valuations necessary for Veritas shareholders to appraise the implications of the Mad Butcher sale and decide whether the terms of the sale are fair.
The board supports the sale and recommends shareholders vote in favour.
Proceeds from the purchase will be used to pay down Veritas’ debt with ANZ, which stands at almost $30 million.
Veritas’ debt repayments to ANZ were due on October 2 but had been twice extended, first to November 30 and again to February 28 next year, due to a number of scenarios including asset sale proposals not being completed.
If Veritas shareholders approve the Mad Butcher sale, completion is scheduled to occur in early 2018.