Letter to Shareholders, 1974, Re Takeover Offer from ECF
For many years St. Edmunds Bacon Factory Ltd. has been under capitalised and your Management Committee, faced with a commitment for capital expenditure of about £100,000, recommends a merger with Eastern Counties Farmers Ltd. Earlier this week E.C.F., an integrated agricultural co-operative covering eight eastern counties between the Thames and the Wash, reported a turnover of £26 million and profits of £¾ million in 1973. These figures represented an increase of 50% in trade and more than 60% in profitability compared with the previous year.
In considering the means of overcoming our problems your Management Committee studied approaches from a number of commercial organisations. In the final analysis one of the vital considerations was that of maintaining farmer control and participation in our Society, which has been an agricultural co-operative since 1911. In addition, of course, ECF’s trading area includes one of the largest concentrations of pig producers in Europe. We were particularly impressed by the way in which ECF had applied sound commercial principles in solving their own difficulties in the late 1960s. Most particularly we noted their emphasis on professional management allied to the close involvement of members in policy making. Within three or four years ECF have become one of the most progressive and viable agricultural co-operatives in the country. ECF Managing Director (Mr. E. Thomas) and their Financial Director (Mr H. N. Piper) have been co-opted to our Management Committee, and ECF has given the extremely urgent financial assistance needed by guaranteeing the Society’s bank overdraft. ECF have made a formal offer for the exchange of its shares for those held by members in the Society and the Committee recommends your acceptance of the offer.
This preliminary statement is issued as members are entitled to information about the steps which the Management Committee are taking to ensure the continuation, prosperity and expansion of the business. Full details of this offer, together with notice of a special meeting of members to consider it, will be sent to you as soon as possible.
W. F. JOHNSTON,