Mr. Chips delisted from NZ stockmarket if takeover by Simplot succeeds

The NZX looks set to have another bite taken out of it as potato products maker Mr Chips faces the prospect of a takeover.

Food manufacturer Simplot Australia intends to delist Mr Chips if its takeover offer is successful. Majority shareholder Sinclair Long Term Holdings, which owns 53 per cent of the company, has indicated that it intends to accept the offer, subject to certain conditions being met.

Shares in the company have surged following a market announcement on Thursday advising shareholders to hold on to their shares. They closed yesterday at $2.15, up 15c.

Mr Chips chairman Graeme Edwards said the offer represented a "substantial premium"over the company's share price.

"Simplot has an ongoing supply arrangement with Mr Chips, while Sinclair Holdings has indicated in the past that it wished to exit the business.

Simplot Australia is a wholly owned subsidiary of the J R Simplot Company and owns some of Australia's best known food brands, including Birds Eye and Leggo's.

Simplot intends to expand the Mr Chips business with current management and some potato growers