Archive | NPT

Kiwi proposal for NPT finalised “in next few days”

NPT Ltd expects to conclude arrangements with Kiwi Property Group Ltd in the next few days on Kiwi’s proposal for NPT’s future.

NPT chief executive Tony Osborne said today the company expected to hold a special shareholder meeting in April.

Kiwi has proposed:

It will sell The Majestic Centre & North City Shopping Centre (the Kiwi Properties) to NPT for $230 million
It will pay NPT a one-off $6 million to acquire the right to manage NPT & its property portfolio, and
It will take a cornerstone shareholding in NPT of about 19.9%.

Earlier stories:
6 March 2017: NPT works through detail of Kiwi bid
12 January 2017: Augusta drops court action but NPT meeting likely delayed
8 January 2017: NPT interim report shows company treading water
14 December 2016: Kiwi proposal for NPT revealed
2 December 2016: Augusta gets February court date while NPT continues with meeting plan
23 November 2016: Lack of revaluations halves NPT profit
4 November 2016: NPT considering more than just Augusta’s proposal
31 October 2016: 
Fourth era for NPT a hard option to combat
27 September 2016: 
Augusta buys 9% of NPT

Attribution: Company release.

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NPT works through detail of Kiwi bid

NPT Ltd chair Sir John Anderson said on Friday negotiations were progressing constructively with potential cornerstone shareholder Kiwi Property Group Ltd, but he still hasn’t set the date for a shareholder meeting to consider offers.

NPT said on 11 January the original bidder to take the company over, Augusta Capital Ltd, had dropped its High Court quest to get that meeting brought forward, and Sir John didn’t mention Augusta in his statement on Friday.

On the Kiwi proposal, he said: “Attending to the finer details of the management agreement, sale & purchase agreements and terms of the share subscription, as well as arrangement of other funding for the transaction, is taking longer than initially expected.

“It is critical that the board & Kiwi take the time to get this level of detail right, and for the board to ensure that it achieves the best possible position for NPT & the shareholders in the circumstances.”

He expects the shareholder meeting will now be held in April.

Attribution: Company release.

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Augusta drops court action but NPT meeting likely delayed

Augusta Capital Ltd has dropped the High Court proceeding it lodged against NPT Ltd to force an earlier shareholder meeting on an Augusta proposal to inject properties into NPT and replace the NPT board.

NPT had said it would send shareholders the meeting date this month and that it intended to hold the meeting in February to consider Augusta’s & other proposals. However, NPT chair Sir John Anderson told NZX yesterday that, “at this stage, it intends to issue the notice of meeting in February and hold the meeting as soon as possible after that”.

Augusta proposed injecting 3 properties worth $327 million into the company and buying out the management contract. In December, NPT disclosed a competing proposition from Kiwi Property Group Ltd, which proposed injecting 2 of its properties worth $230 million, becoming a cornerstone shareholder with a stake up to 19.9%, also buying out the management contract, but leaving the NPT board intact for the moment though with a succession plan.

Sir John said Augusta’s court action was “an unfortunate distraction. The proceedings were not constructive.

“We are very committed to engaging with shareholders as soon as possible on the very important matters before the company. We will make every effort to hold this shareholder meeting in February, but are conscious that the process of due diligence of the Kiwi Property assets, negotiation of terms and preparation of the shareholder information memorandum may mean this is not possible. In the event of a delay, we certainly expect to be in a position to issue a notice of meeting in February, with a view to holding the meeting soon thereafter.

“Unless Augusta formally withdraws its proposed resolutions, we will still put those to shareholders at the meeting. At the same time full details of the transactions proposed by Kiwi Property Group will be provided to shareholders together with the resolutions required by NZX listing rules for consideration.“

Earlier stories:
8 January 2017: NPT interim report shows company treading water
14 December 2016: Kiwi proposal for NPT revealed
2 December 2016: Augusta gets February court date while NPT continues with meeting plan
23 November 2016: Lack of revaluations halves NPT profit
4 November 2016: NPT considering more than just Augusta’s proposal
31 October 2016: 
Fourth era for NPT a hard option to combat
27 September 2016: 
Augusta buys 9% of NPT

Attribution: Company release.

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NPT interim report shows company treading water

Under-siege listed property investor NPT Ltd posted its interim report & presentation on 30 December, confirming that it remains little more than a vehicle for somebody else’s greater purpose.

The accounts show the company’s 5 properties have overall occupancy of 98.1% – Print Place in Christchurch, a $13 million property, and the $27.2 million Heinz Wattie’s Warehouse in Hastings both on 100%, the $35 million Roskill Centre in Auckland on 97.5%, $58 million Eastgate Shopping Centre in Christchurch on 96.2% and the $36.7 million AA Centre in Auckland down at 92.2%.

Net rental climbed from $5.48 million in the September 2015 half to $6 million in March 2016, but declined to $5.54 million in the September 2016 half.

Directors said in their 30 December presentation the special shareholder meeting planned for February would determine the company’s strategic direction. Meanwhile, they’d focus on unlocking value within the existing portfolio, including looking to further value-add opportunities at Eastgate.

“Given the strong Auckland cbd office leasing market, we will upgrade an additional floor at the AA Centre.”

In an ironic poke at the fluctuating management style – in & out of house over the years, and heading out again no matter who wins the battle for control – NPT would “leverage the closer tenant relationships following the internalisation of the property management function”.

Augusta Capital Ltd bought 9.26% of NPT last September and proposed injecting 3 properties worth $327 million into the company, buying out the management contract and, because of the NPT board’s resistance, replacing the 3 directors.

In December, Kiwi Property Group Ltd came to the board’s at least temporary rescue, if not the company’s, with a proposal to inject 2 of its properties worth $230 million, becoming a cornerstone shareholder with a stake up to 19.9%, also buying out the management contract, but leaving the NPT board intact for the moment though with a succession plan.

When St Laurence Holdings Ltd acquired the management contract on 1 December 2005 for what was then The National Property Trust, it had $268 million in assets. At November 2007 it had $318 million of assets & $184 million of equity. When unitholders agreed to convert the trust into a company at the end of 2010, assets were down to $189 million following global financial crisis revaluations & sales. Impacts from Canterbury’s earthquakes in 2010-11 and the collapse of management contract owner St Laurence drove the portfolio value down to $162 million at September 2011.

It took another 5 years, to September 2016, to get the portfolio back up to $170 million, with net equity at $120 million.

The NPT board hasn’t set a date yet for the special shareholder meeting which will determine the company’s future, beyond saying it will be in February.

Links:
NPT, interim result presentation
NPT, interim report
Kiwi Property proposal

Earlier stories:
14 December 2016: Kiwi proposal for NPT revealed
2 December 2016: Augusta gets February court date while NPT continues with meeting plan
23 November 2016: Lack of revaluations halves NPT profit
4 November 2016: NPT considering more than just Augusta’s proposal
31 October 2016: 
Fourth era for NPT a hard option to combat
27 September 2016: 
Augusta buys 9% of NPT

Attribution: Company release.

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Kiwi proposal for NPT revealed

NZX-listed NPT Ltd chair Sir John Anderson revealed a second offer yesterday which he said the board preferred over one from Augusta Capital Ltd, this one coming from Kiwi Property Group Ltd.

Augusta, which became a 9.26% NPT shareholder in September, has been trying to get an NPT shareholder meeting called to consider its proposal, which involves injecting 3 properties worth $327 million into NPT, buying out the NPT management contract and, because of the NPT board’s resistance, replacing the 3 directors.

Sir John said Kiwi Property proposed injecting 2 of its properties worth $230 million, becoming a cornerstone shareholder with a stake up to 19.9%, also buying out the management contract, but leaving the NPT board intact for the moment though with a succession plan.

Sir John said the Kiwi proposal was one of 4 received, and the NPT board intended to recommend it to a shareholder meeting which would be called for February. He said yesterday: “As well as our own review, we commissioned an independent assessment by specialist advisors, Northington Partners Ltd, and have consulted with major shareholders. The outcome is that we believe the Kiwi Property proposal is likely to deliver the best short- & long-term benefits to shareholders.”

The 2 Kiwi properties to be added to NPT’s small portfolio are North City shopping centre, Porirua, and the Majestic Centre, Wellington. Kiwi has proposed that NPT fund the transaction via a capital raising & bank debt.

Northington Partners said its conclusion reflected the following key elements:

  • The acquisition of properties from Kiwi Property was more consistent with NPT’s existing portfolio & strategy
  • The Kiwi Property proposal would lead to an immediate & considerably higher level of earnings accretion
  • Kiwi Property would make a significantly higher payment for the externalisation of the management contract
  • Kiwi Property had proposed a more “investor friendly” management contract, with the ability to terminate without cause and the maintenance of an independent NPT board, and
  • The Kiwi Property proposal would provide NPT with the ability to leverage the Kiwi Property management resources to benefit the existing NPT portfolio.

Kiwi has proposed assuming management of the NPT portfolio for $6 million. Sir John said the management agreement could be terminated without cause, on a fee equivalent to the greater of fair market value or 2.5% of tangible assets. NPT would gain access to Kiwi’s fund & property management expertise, its shareholders would benefit from a material reduction in the management expense ratio and from potential investment performance upside resulting from the application of Kiwi’s specialist management capability.

Benefits ascribed to the proposal:

  • An increase in portfolio scale, from $170 million to $400 million, with no material increase in gearing
  • An increase in market capitalisation, from $110 million to $265 million, assisting liquidity & market appeal
  • An immediate 16% increase in earnings/share, from 3.58c to 4.16c
  • A reduction in NPT’s management expense ratio from 99 to 70 basis points/share, made possible by access to Kiwi’s management platform
  • Investment performance upside for NPT made possible by access to Kiwi’s specialist management capabilities and significant resources.

Link:
Kiwi Property proposal

Earlier stories:
2 December 2016: Augusta gets February court date while NPT continues with meeting plan
30 November 2016: NPT sticks to its programme as Augusta goes to court
 16 November 2016: NPT calls in Northington to weigh up options
4 November 2016: NPT considering more than just Augusta’s proposal
31 October 2016: Fourth era for NPT a hard option to combat
27 September 2016: Augusta buys 9% of NPT

Attribution: Company release.

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Augusta gets February court date while NPT continues with meeting plan

The scrap between 2 listed property companies, Augusta Capital Ltd & NPT Ltd, reached an odd point today: NPT, having said it will call a shareholders’ meeting for February, faces a 10 February court date on Augusta’s application to require this meeting “as soon as reasonably possible”.

Augusta said yesterday NPT’s board had been holding out since August on considering the Augusta proposals to add $327 million of properties to the NPT portfolio and for Augusta to take over NPT’s management contract.

Because of the inaction, Augusta proposed a shareholder meeting to replace the existing NPT board.

The court decision is largely irrelevant, because a 10 February hearing won’t ensure the meeting is held any earlier than the end of February.

NPT chair Sir John Anderson called the legal proceedings an “unfortunate distraction”, as the practical considerations meant an earlier shareholder meeting wasn’t logistically possible.

He said there was no compelling reason to depart from the timetable already set, and added: “We are confident that the meeting will take place before the legal process is completed, and so this action is not constructive and is in fact pointless.”

Previous story, 30 November 2016: NPT sticks to its programme as Augusta goes to court

Attribution: Company release.

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NPT sticks to its programme as Augusta goes to court

Augusta Capital Ltd has filed proceedings in the High Court seeking orders requiring NPT Ltd to call a meeting of its shareholders earlier than next February.

Augusta bought 9.26% of NPT Ltd from the Accident Compensation Corp at the end of September and put a proposal to NPT at the end of October. It wanted NPT to buy a portfolio of 3 unidentified properties valued at $329 million, it wanted to buy NPT’s management contract, and it wanted to help NPT grow its portfolio to improve returns. When NPT’s 3-man board baulked, Augusta asked for its proposal to go to shareholders and for the NPT board to be replaced.

The NPT board said in response it had already been considering other proposals “close to the date Augusta presented its proposal” and wanted to give due consideration to all of them. It engaged independent financial advisor Northington Partners Ltd to assess all proposals, said it would set a meeting date in January and expected that meeting to be in February.

On Monday, the NPT board said it had received 3 substantive proposals apart from Augusta’s.

NPT chair Sir John Anderson said its timetable was fair & reasonable, taking the Christmas break into account: “The board is concerned that Augusta is trying to play a fast game in an attempt to hurry the process in its own interests. Shareholders & interested parties should consider Augusta’s likely motives in trying to effect board changes to result in its own nominees holding the majority of board seats immediately ahead of consideration of its own proposal under which it would sell properties to NPT and assume management control of the company.

“The board remains open to Augusta’s proposal and wishes to assess that proposal and all other proposals through a robust process, and will keep shareholders regularly updated.”

Earlier stories:
16 November 2016: NPT calls in Northington to weigh up options
4 November 2016: NPT considering more than just Augusta’s proposal
31 October 2016: Fourth era for NPT a hard option to combat
27 September 2016: Augusta buys 9% of NPT

Attribution: Company release.

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Lack of revaluations halves NPT profit

NZX-listed property company NPT Ltd’s half-year profit was cut in half this year after the company carried out no valuations.

Revaluations in the September 2015 half-year added $2.7 million of unrealised gains to the $3.3 million operating profit. Unrealised losses from swaps cut the return in both years, by $521,000 last year and $420,000 this time, and this year the company added a small loss from the sale of plant & equipment.

The result was a 47.5% drop in pretax net profit, from $5.495 million to $2.883 million. After tax, the fall was 50.1%, from $5.076 million to $2.531 million.

NPT is a small listed company under pressure. Augusta Capital Ltd bought 9.26% of it from the Accident Compensation Corp in September and put proposals to NPT’s board in October to inject $329 million of properties into the NPT portfolio and, in return, to take over its management contract.

When NPT’s 3-man board baulked, Augusta asked for its proposal to go to shareholders and for the NPT board to be replaced.

NPT called in independent financial advisor Northington Partners Ltd a week ago and said it expected to hold a shareholder meeting in February to consider proposals by Augusta Capital Ltd & other unidentified parties.

NPT said in its report on the half-year result it increased trading profit by 2.26% to $3.39 million, on gross rental income down 0.47% ($40,000) from the September 2015 half to $8.426 million. After a $100,000 cut in direct property expenses, net rental income was up $60,000 to $5.535 million.

The company’s property portfolio increased in value by 3.93% to $169.854 million ($163.42 million), and net tangible asset backing was steady at 73.77c/share (73.68c/share).

Distributable profit after current tax was 1.87c/share (1.81c). Basic & diluted earnings/share were 1.56c (3.13c).

Shareholders will receive a cash dividend of 0.9c/share for the September quarter (0.875c/share last year), with imputation credits unchanged at 0.1544c/share.

Earlier stories:
16 November 2016: NPT calls in Northington to weigh up options
4 November 2016: NPT considering more than just Augusta’s proposal
31 October 2016: Fourth era for NPT a hard option to combat
27 September 2016: Augusta buys 9% of NPT
24 May 2016: Revaluations lift NPT above 2015 result
25 November 2015: NPT lifts trading profit 6%

Links:
Augusta
NPT

Attribution: Company release.

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NPT calls in Northington to weigh up options

NZX-listed property investor NPT Ltd said on Monday it expects to hold a shareholder meeting in February to consider proposals for its future by Augusta Capital Ltd & other parties.

NPT has engaged independent financial advisor Northington Partners Ltd to provide advice about Augusta’s proposal.

Augusta bought a 9.26% stake in NPT from the Accident Compensation Corp at the end of September. Then, at the end of October, Augusta revealed its intentions: It wanted NPT to buy a portfolio of 3 unidentified properties valued at $329 million, it wanted to buy NPT’s management contract for $3.5 million in cash, and it wanted to help NPT grow its portfolio to improve returns. When NPT’s 3-man board baulked, Augusta asked for its proposal to go to shareholders and for the NPT board to be replaced.

NPT chief executive Tony Osborne said the NPT board met last Friday to discuss the proposals, including Augusta’s desire for the new board (comprising the 3 Augusta nominees & one other director) to negotiate the terms of the transactions to be entered into with Augusta.

“However,” Mr Osborne said, “the board of NPT believes that, in voting on the resolutions at the meeting, shareholders will require some analysis of the Augusta proposal to help in determining what a vote for a new Augusta board means compared to a vote to retain the existing independent board.”

NPT has asked Northington to consider whether the Augusta proposal is in the best interests of NPT & all its shareholders, and to weigh it against alternative proposals it’s received. Preliminary advice to the NPT board was that the Augusta proposal “may not provide the best option”.

NPT expects it will take 6 weeks to more fully develop options, and that a notice of meeting should go out in January for a meeting in February.

Earlier stories:
4 November 2016: NPT considering more than just Augusta’s proposal
31 October 2016: Fourth era for NPT a hard option to combat
27 September 2016: Augusta buys 9% of NPT

Attribution: Company release.

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NPT considering more than just Augusta’s proposal

NPT Ltd’s board stalled yesterday in responding to Augusta Capital Ltd’s bid for a deal combining an increase in NPT assets and a buyout of its management contract.

The NPT board said it had already been considering other proposals “close to the date Augusta presented its proposal” and wanted to give due consideration to all of them.

The board said it had also sought NZX guidance on some aspects of Augusta’s request for a special shareholder meeting.

Augusta said it wanted to tip the 3-man NPT board and install its own nominees after NPT chair Sir John Anderson didn’t respond to the proposal.

Augusta bought a 9.26% stake in NPT from the Accident Compensation Corp at the end of September.

NPT chief executive Tony Osborne said yesterday the small listed property company had “engaged with external expert advisors to provide robust assessment of the merits of each proposal. Since the Augusta proposal was disclosed to the market, further parties have expressed interest in submitting proposals and the board remains open to reviewing these as well.

“The proposals are all non-binding, indicative & incomplete, and no agreements have been entered into. The board is committed to ensuring that through this process of evaluation the best interests of the company & all its shareholders will be foremost in their minds. Once all aspects of the proposals have been fully assessed, the board will be in a position to provide a further update to the market.”

Earlier stories:
31 October 2016: Fourth era for NPT a hard option to combat
27 September 2016: Augusta buys 9% of NPT

Attribution: Company release.

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