An Australian company set up to consolidate the holdings of shares in Michael Hill International held by the Hill family through their family trusts is seeking a controlling stake in MHI.
The company, Durante Holdings, is a wholly owned subsidiary of one of the Hill family trusts.
On consolidation, it will own 182.4 million shares in MHI, representing 47.6% of all the shares.
Durante said yesterday it was offering to buy 5% of the shares it did not already own in MHI.
That would see it buy 10 million shares and would take its holding to 50.2%.
The offer price is 90c per share.
MHI shares have ranged between 85c and 64c in the past year.
"The risk for shareholders is that Michael Hill may feel he wants to go further in future years and buy back all of the shares.
That may well be in his long-term thinking," Mr McIntyre said yesterday.
Mr Hill had recently told shareholders they needed to take a longer term view of the stock.
He had become frustrated with comments made about the overseas expansion plans that had not worked out as expected. Mr Hill had wanted more time.
Mr McIntyre said Mr Hill had grown increasingly frustrated and believed the MHI shares represented good value.
Moving above the 50% holding gave the family more control of the company, and from there it was possible to increase the shareholding by 5% a year.
Two major institutions - ACC and the New Zealand Superannuation Fund - had indicated their willingness to sell, he said.
While that did not mean it was already a done deal, it was a good start, Mr McIntyre said.
