To the Editor of the "Nonra-Cniwa Dany News,"
Sim—With reference to the meet called by the Directors of 8. 0. Farnham, Boyd & Ca, Ld., for the 26th instant, it seems to mo that the circular requires the very careful consideration of all who are interested in the Company.
It will be observed from the wording of the Circular that nothing in the form of an offer has been received. This mesons that under certain conditions a proposal may eventuate into something, as to which the shareholders are entirely ignorant. I append below various details which it would be to the interest of all shareholders to take into consideration before they vote away their property, which is at the moment of a tain value, for a return the value of which is undetermined.
All that the "proposal" gives definitely is that each shareholder will receive a cash return for the par value of his stock. In addition to this he receives scrip of the nominal value of £16, but the actual market, or investors value of the paper will depend entirely upon the proportion that this bears to the capital of the pro new Company. No doubt the capital of the old Company will be less than that of the new. This is practically what is ordinarily termed "watering the stock," and unless the new Company can increase its earnings, there is nothing, as far as present shareholders are concerned,- to be gained in so doing.
It would materially clear the atmosphere if at the meeting the shareholders were to receive clear and straightforward answers to the following questions When wore the negotiations for the sale of the property commenced Why the shareholders were not informed of such negotiations at the last General Meeting, on the 19th July,1904 Why this information was given to a few brokers, and withheld from the general body of shareholders What is to be the capital of the new Company, in which the present shareholders are asked to invest
The earning power of the present seven million taels Company, during the past three years, has been as follows Year ending 30th April 1904 717,428.96 1903 910,973.92 1902 1,697,463.56 The book value of the property to be taken over by the new Company was, on the 30th April, 1904, Taels, 6,102,281.60, for which it is proposed to pay' to the present shareholders
Text read from the printed page and cleaned; old type leaves the occasional error.