Archive | NPT

Augusta & NPT reach broad agreement on portfolio management

Augusta Capital Ltd has entered into a non-binding agreement with NPT Ltd to manage NPT’s property portfolio.

The non-binding portfolio management agreement, announced yesterday, is subject to due diligence by both parties, negotiation of the terms of the management agreement and the approval of NPT shareholders.

The portfolio is a thin one. NPT has agreed to sell to SkyCity Entertainment Group Ltd its interest in the AA Centre, which runs from Albert St to SkyCity’s front door on Federal St in downtown Auckland. Settlement is scheduled for next July.

The listed property investor has 4 other assets – the Heinz Wattie national distribution centre in Hastings, the Eastgate mall & Print Place in Christchurch, and the 22 Stoddard Rd shopping centre in Mt Roskill, Auckland.

NPT shareholders voted in April to hand the company’s management contract to Augusta, defeating a proposal for Kiwi Property Group Ltd to take over. Augusta lifted its NPT stake to 18.85% before the meeting, and won the vote with the support of associates.

This time round, Augusta won’t be allowed to vote because it’s a related party. Approval will be by an ordinary resolution, requiring over 50% support.

Under the proposal, Augusta will pay NPT $4.5 million to buy the management rights.

Bruce Cotterill.

NPT chair Bruce Cotterill said other key terms included:

  • The agreement will be for no less than 5 years (unless terminated by either party for cause) and thereafter will continue until NPT exercises its right to discontinue, which would require a resolution of shareholders, and
  • The fees charged under the management agreement will be in line with sector benchmarks.

Mr Cotterill commented: “Importantly, the NPT board considers that the proposed investment strategy outlined by Augusta is closely aligned with its views on the preferred way forward for NPT.

“We anticipate the process to move from agreement in principle to finalised documents that can be put before shareholders for consideration could take about 6-10 weeks, although the Christmas period may interrupt that process.”

Francis says agreement “best in class”

Mark Francis.

Augusta managing director Mark Francis said Augusta “considers that the remaining key terms, including management fees & termination rights, are best in class compared to other external management agreements in the New Zealand listed property sector”.

He said the 2 companies would work towards agreeing the full terms of the management agreement so NPT can call the shareholder meeting as quickly as possible.

Mr Francis believed externalising management would be accretive to NPT’s earnings: “Augusta has proposed a ‘yield plus growth’ investment strategy for NPT, which Augusta believes will strongly differentiate NPT from other investment options in the listed property sector and suits the current low-yield environment.

“Augusta has a track record of identifying & adding value to assets. The strategy would see Augusta tasked with repositioning the existing portfolio of assets as well as identifying assets for acquisition which it believes have strong yield & growth opportunities.

“If approved, the externalisation would increase Augusta’s recurring management fee income by about $900,000/year, based on NPT’s current balance sheet. Further details will be available once a binding agreement is entered into and a notice of meeting issued by NPT to its shareholders.”

Links: NPT
Augusta Capital

Earlier stories:
15 October 2017: SkyCity buys AA Centre to consolidate precinct control
28 August 2017: Cotterill sees opportunity for NPT as tenants quit
21 April 2017: Augusta wins fight for NPT
27 September 2016: Augusta buys 9% of NPT

Attribution: NPT & Augusta releases.

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SkyCity buys AA Centre to consolidate precinct control

SkyCity Entertainment Group Ltd has bought NPT Ltd’s interest in the AA Centre at 99 Albert St in central Auckland for $47 million.

SkyCity said the acquisition was consistent with its intention to consolidate control over its Auckland precinct as part of the Auckland masterplanning it’s undertaken: “The masterplan, once completed, will incorporate opportunities for further hotels, apartments, food & beverage outlets, entertainment facilities & office spaces, with the aim of having a cohesive & integrated mixed-use entertainment precinct, and will ensure that SkyCity leverages the benefits of the increased pedestrian traffic flows anticipated following completion of the city rail link.”

Image above: The AA Centre is across the Victoria St West intersection from an entrance for the city rail link Aotea Station, one full block up from Queen St and one block from the SkyCity casino & tower (at right).

The rear entrance to the SkyCity Grand Hotel & original convention centre is from Albert St, a few doors along from the AA Centre.

The 2 NZX-listed companies entered a conditional agreement on 31 August and it went unconditional last Thursday, 12 October. Settlement is scheduled for 12 July 2018.

Under the agreement, NPT must complete $2 million of capital improvements, which it began before the agreement was signed.

Bruce Cotterill.

NPT chair Bruce Cotterill said that, after allowing for those capital improvements, the transaction would increase NPT shareholder equity by $2 million over the $40.85 million valuation at 31 March.

The yield was about 7% on rent which wasn’t stated in NPT’s annual report or in this announcement. Occupancy of NPT’s share of the building at 31 March was 91.6%.

NPT owns 15 levels (12,000m²) of the 17 office floors, ground-floor retail, the through-site link to Federal St & 90 parking spaces.

The NZ Automobile Association owns the other 2 office levels, some ground-floor retail and a few parking spaces.

Mr Cotterill said: “The sale of this property represents a first step on the path to repositioning NPT. We have achieved a very good price, as compared with current book value, and the 9-month settlement period allows us to maintain current profit & distribution forecasts through to 31 March 2018 while we progress the board’s broader plans for NPT.

“The board is intending to update shareholders on its proposed strategy for the future of NPT in the coming weeks. The sale proceeds will be used to invest in the purchase of assets where we can see an opportunity to add value.”

SkyCity expected the acquisition to be “marginally earnings accretive” from its 2019 financial year. The company will fund the acquisition from existing bank facilities.

Attribution: NPT & SkyCity releases, NPT annual report.

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Cotterill sees opportunity for NPT as tenants quit

Image above: The AA Centre on the corner of Albert & Victoria Sts in downtown Auckland, between the bungy jumps of the Royal International site & Sky Tower, and with works underway at the corner for the city rail link tunnel & station.

Listed property investor NPT Ltd has tenants leaving 2 of its 5 properties – one of them quitting 6 office floors – and the new board sees opportunity.

Bruce Cotterill.

New chair Bruce Cotterill was dying to tell shareholders about impending investment activity at the annual meeting in Auckland on Friday, but didn’t quite have everything in place to make the revelations.

“While we aren’t in a position to provide any detail at this time, we are working on a number of initiatives that we expect will deliver better returns to our shareholders and would set us on a clear path to growth. Although it is early days in our tenure as directors, this board has made rapid progress and shareholders may expect an update in the coming weeks as some of our initiatives come to fruition,” he said.

NPT has had a chequered history since its inception as the National Property Trust in 1994, but one thing about it hasn’t changed: it started small and has remained so, getting its portfolio over $200 million in value for a while but now down at $174 million.

Its change in prospects began last September when Augusta Capital Ltd bought 9.26% of its shares from the Accident Compensation Corp, then proceeded to make an offer for its management contract. In October, Augusta said it also wanted NPT to buy a portfolio of 3 unidentified properties valued at $329 million, and it wanted to help NPT grow its portfolio to improve returns.

This latter was odd, because Augusta had whittled down its own portfolio in favour of managing syndicates. NPT’s board baulked, and so began a struggle for control that cost NPT $2 million.

The loser, at a special shareholder meeting in April, was Kiwi Property Group Ltd, which also wanted NPT to buy properties – 2 assets valued at $230 million, the Majestic Centre in Wellington & North City Centre at Porirua, now on the market through an expressions of interest process.

Augusta won the fight for control after lifting its holding to 18.85% and the total  vote against Kiwi’s proposal was 54.85%.

Mr Cotterill was installed as independent chair; a recently appointed member of the old board, Carol Campbell, remained as an independent (and had her position confirmed at Friday’s meeting); and Augusta’s new chair, Paul Duffy, and another independent, Allen Bollard, were elected.

AA moving to Sale St

Mr Cotterill told shareholders AA Insurance had recently informed the company it intended to relocate to a new office building under construction by Mansons on Sale St in February 2018, although its lease on its 6 floors in the AA Centre – right above the Aotea station being constructed beneath its Albert-Victoria St windows – runs until June 2019.

Said Mr Cotterill: “This departure will provide us with a further opportunity for refurbishment & repositioning of the building in the Auckland City office leasing market. Leasing inquiry for the floors that are to become vacant is very strong and we expect to be able to lease them relatively quickly.”

He said NPT had been working on leasing the AA space for a couple of months: “We don’t have signatures on paper but we do have good inquiry.”

Print Place – repositioning or disposal?

In Christchurch, NPT’s property at 17 Print Place, Middleton, recently lost one of its 3 tenants and will lose another in December. On this, Mr Cotterill told shareholders the vacancy & shortening weighted average lease term had resulted in the value of the property easing. But again Mr Cotterill saw opportunity: “This vacancy may provide us with an opportunity to reposition the property.”

Mr Duffy said it was over-rented and had too much office space relative to its warehousing.

One shareholder questioned the board about NPT being an absentee landlord, but Mr Cotterill responded: “We agree with you, and we’ve appointed Colliers [as manager of its Christchurch properties]. They haven’t got any tenants yet because we only agreed to appoint them this morning.”

Mr Cotterill agreed with another shareholder that selling Print Place was also an option. He said the new board had 2 strategies to focus on – growing the portfolio, and repositioning what it already owned.

He cautioned that growth wouldn’t be easy: “We’re trying to rebuild when prices are at their peak. That’s not the easiest thing to do.”

He said the board recognised that “mum & dad” shareholders relied heavily on dividends and the board intended to maintain dividends at their present level. On Friday afternoon the board announced a 0.9c/share first-quarter cash dividend, carrying 0.1544c/share of imputation credits, and gave full-year guidance that total dividends would be at least the same as last year, 3.6c/share.

Again, Mr Cotterill presented the optimistic outlook: “This represents a conservative approach to 2018 financial year distributable profit while the board considers a number of options before it for NPT’s future direction. A further update can be expected on the board’s plans for NPT in the coming weeks.”

At the moment, NPT’s management remains internal – Kiwi’s proposal to buy it was defeated in April and Augusta’s proposal wasn’t put to that meeting, but Mr Cotterill said the outcome of the April meeting had raised interest in taking over the contract. One party had turned its talks into a proposal and the board was discussing the possibility with another: “There’s nothing concrete,” he said.

Earlier stories:
2 June 2017: NPT profit eaten up in battle over its future
26 April 2017: Cotterill takes chair at NPT
21 April 2017: Augusta wins fight for NPT
7 April 2017: Augusta lifts stake in fight for NPT
31 March 2017: An unlikely twist could still derail NPT’s Kiwi deal
31 October 2016: Fourth era for NPT a hard option to combat
27 September 2016: Augusta buys 9% of NPT

Attribution: Annual meeting.

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NPT profit eaten up in battle over its future

Small listed commercial property owner NPT Ltd increased its gross rental income by 1% in the year to March, but saw its net after-tax profit plunge by 63% through costs associated with the battle for its future.

Control of the company shifted post-balance date to listed funds management specialist Augusta Capital Ltd.

At a special meeting in April, NPT shareholders voted to hand the company’s management contract to Augusta, defeating a proposal for Kiwi Property Group Ltd to take over.

Augusta lifted its NPT stake to 18.85% before the meeting, and won the vote with the support of associates.

Former Ngai Tau Property Ltd director Tony Sewell had taken over the chair at NPT from Sir John Anderson in March, but was ousted in April and the new chair is Bruce Cotterill. Augusta chair Paul Duffy and former Tramco Group Ltd chief executive Allen Bollard also joined the NPT board, Jim Sherwin was voted out and the one director to stay on is Carol Campbell.

Mr Cotterill said on Wednesday the new board was undertaking a thorough analysis of the 2018 financial year’s business plan before confirming guidance on the cash dividend for the year, and was also working on a plan to take NPT forward. He expected to release an update before the annual meeting in August.

Mr Cotterill said NPT’s results for the financial year just ended were negatively impacted by the costs associated with the Kiwi Property proposal that didn’t proceed and assessing other proposals, primarily for legal fees, due diligence, financial analysis and holding the April special meeting. The total cost incurred in the 2017 financial year was $1.339 million and a further $348,000 has been incurred in the 2018 financial year.

“There are still a number of challenges ahead of us that are mostly a consequence of a lack of scale. The board is committed to improving returns to shareholders and is focused on advancing the necessary steps in support of this goal as quickly as practical. Once a plan for NPT’s future is sufficiently developed, the board looks forward to engaging with shareholders to seek their views before moving forward with any significant course of action.”

Key financial performance points (2016 figures in brackets):

  • Gross rental income up 1% to $17.15 million ($16.98 million)
  • Net profit after tax down 63.1% to $3.1 million ($8.4 million)
  • Distributable profit before tax down 1.4% to $7.2 million ($7.3 million)
  • Distributable profit after tax down 0.2% to $6.1 million ($6.1 million) or 3.78c/share (3.79c/share)
  • Loan:value ratio 33.2% (28.2%)
  • Net tangible asset backing 72c (74c)
  • Cash dividend maintained at 3.6c/share for the full year, 0.9c/share for fourth quarter

Property portfolio update

NPT undertook several substantial capital investment projects during the year, and chief executive Tony Osborne said some of that contributed to an increase in rental revenue, particularly at Eastgate & 22 Stoddard Rd: “Further gains will be realised as vacant space at Eastgate & the AA Centre is leased.”

Highlights:

  • Net rental income up 2.6%
  • Increased valuations at Eastgate, 22 Stoddard Rd & AA Centre, offset by reduction in valuations at Print Place & Heinz Watties; overall loss of $1.7 million after taking capital expenditure into account
  • Occupancy at 96.0% (97.1%)
  • Weighted average lease term 4.6 years (5.4 years)
  • 22 Stoddard Rd back to 100% occupancy
  • Refurbishment of AA Centre level 8 nearing completion.

Attribution: Company release.

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Cotterill takes chair at NPT

Bruce Cotterill (pictured) replaced Tony Sewell today as chair of NZX-listed property company NPT Ltd, following the success at last Friday’s special shareholder meeting of 5 resolutions to change board membership.

Mr Sewell, who’d replaced the retiring Sir John Anderson as chair on 17 March, and Jim Sherwin were voted out, Carol Campbell’s position as an independent director wasn’t questioned and she remains on the board, new directors Mr Cotterill & Allen Bollard have been declared independents and the other new director, Augusta Capital Ltd chair Paul Duffy, is not independent.

Augusta bought 9.26% of NPT last August, tried unsuccessfully to get Sir John to call a shareholder meeting on its proposals, which included taking over NPT’s corporate & portfolio management, and took its holding to 18.85% a fortnight ago.

The first resolution at Friday’s meeting, recommending shareholders support a proposal by Kiwi Property Group Ltd to sell NPT 2 properties and buy the management rights for NPT’s portfolio, was defeated with a 54.87% vote against.

Mr Cotterill was New Zealand managing director and then regional managing director of real estate consultancy Colliers Jardine for 5 years in the 1990s. 2 years ago he was appointed an independent director of Pumpkin Patch Ltd. He’s also chaired Noel Leeming Group Ltd and been managing director & chief executive of Yellow Pages Group Ltd and a director of Woosh Wireless Ltd. Now he chairs Move Logistics Ltd, NZ Retail Property Group Ltd’s advisory board and Swimming NZ.

Mr Bollard is a former finance director of the Fletcher Building Group (when it was part of Fletcher Challenge Ltd) and property developer & investor Unity Group, and was chief executive & chief financial officer of Tramco Group Ltd for 9 years before moving into business consulting & governance on his own account in 2012, primarily in property & construction. He’s a director of Viaduct Harbour Ltd, Ross Green’s Riverside Industries Ltd and Tamaki Makaurau Community Housing Ltd.

Former DNZ Property Fund Ltd (now Stride Property Ltd) chief executive & executive director Paul Duffy joined Augusta’s board last November and took over chairing it when Peter Wilson retired in December. Mr Duffy was at DNZ for 13 years, leading its transformation from a large group of syndicates through its NZX listing in 2010 and on to building a $950 million portfolio of managed & directly owned properties. DNZ changed its name to Stride Property Ltd last year. Before joining the DNZ group, Mr Duffy had a long career at Fletcher’s, finishing as general manager of Fletcher Property Ltd and a director of the Fletcher Development Co Ltd.

Earlier stories:
21 April 2017: Augusta wins fight for NPT
7 April 2017: Augusta lifts stake in fight for NPT
31 March 2017: An unlikely twist could still derail NPT’s Kiwi deal
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 wins fight for NPT

Augusta Capital Ltd – kept at bay for 8 months by former NPT Ltd chair Sir John Anderson – won control of the smaller NZX-listed property company today.

Shareholders voted 54.87% against the NPT board’s preference for Kiwi Property Group Ltd to sell 2 properties to NPT and become a cornerstone shareholder, then supported the ousting of 2 directors and appointment of 3 Augusta nominees.

Mr Sewell joined the NPT only last year and replaced Sir John as chair on 17 March.

If anybody was swayed at today’s meeting, it would have been by a handful of figures produced by Salt Funds Management Ltd managing director Matt Goodson, who turned around appearances on returns from competing Kiwi & Augusta proposals, and by both a persuasive address and subsequent pointed interjections from Augusta managing director Mark Francis.

Augusta didn’t have a proposal before today’s meeting. It made one last August when it bought 9.26% of NPT – raised to 18.85% 2 weeks ago – but, for the meeting, only put up resolutions to oust Mr Sewell & Jim Sherwin and install Augusta chair Paul Duffy and 2 independents, Allen Bollard & Bruce Cotterill. Carol Campbell was the one existing director whose position wasn’t questioned.

Both Augusta & Kiwi had proposed buying NPT’s management contract, on very different terms. Augusta’s buyout wasn’t up for a vote today, but the board vote means it can be put in place.

Attribution: Meeting, company release.

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Augusta lifts stake in fight for NPT

The fight for control of NZX-listed NPT Ltd heated up today as Augusta Capital announced it had increased its stake to 18.85%, 2 weeks ahead of a shareholder meeting where the board has recommended supporting a proposal by Kiwi Property Group Ltd.

Augusta bought 9.26% of NPT last August, proposed selling assets into it and taking over company & asset management, then added a proposal to replace the NPT board when NPT was slow to call a shareholder meeting.

That meeting has only just been called, for Friday 21 April, but the only part of it relating to Augusta’s proposal is the vote on board seats – to remove directors Tony Sewell & Jim Sherwin, leaving Carol Campbell as the one remaining member from the existing board, and appointing Augusta nominees Allen Bollard, Bruce Cotterill & Paul Duffy. The NPT board not only favoured Kiwi’s proposal, but set out what it didn’t like about Augusta’s.

Augusta chief executive Mark Francis said today the company had bought 9.59% of NPT from other shareholders for $10,559,674, with settlement to occur next Tuesday, 11 April.

“Following that, Augusta Capital will be the largest shareholder in NPT,” he said. “This week’s acquisition of shares in NPT is consistent with our longstanding plan to grow our funds management business and significantly, it strengthens our position ahead of the NPT special meeting on 21 April.

“Having now carefully assessed the Kiwi Property proposal being recommended by the NPT board, we remain firmly of a view that it is not in the interest of NPT shareholders. While we respect Kiwi Property, the current proposal is heavily skewed in their favour – falling well short of what we consider to be fair & reasonable for NPT shareholders.

“Augusta intends to vote against the Kiwi Property proposal and is aware of a number of other shareholders who have indicated their intention to vote against the Kiwi Property proposal. We would encourage all NPT shareholders to seek independent specialist advice concerning its merits before casting their vote.

“We believe the current board is completely out of touch with its shareholders in recommending this deal, and Augusta Capital will also be voting for change through resolutions 2-6, to remove 2 of the current board members, noting that the previous chairman has already stepped down.”

Earlier stories:
31 March 2017: An unlikely twist could still derail NPT’s Kiwi deal
27 March 2017: Kiwi proposal for NPT finalised “in next few days”
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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An unlikely twist could still derail NPT’s Kiwi deal

NPT Ltd shareholders can replace 2 of their 3 directors with Augusta Capital Ltd nominees at a special meeting called for 21 April, but won’t have the opportunity to vote on Augusta’s proposals for changing their company because Augusta has withdrawn it.

The NPT board has recommended a proposal from Kiwi Property Group Ltd, under which Kiwi would become a 19.9% cornerstone shareholder through the issue of $48 million of new shares and would sell 2 buildings to NPT. That proposal will require NPT to borrow $87 million and raise $94 million from shareholders through a pro rata entitlement offer.

The notice of meeting, sent out yesterday, contains a 2-part resolution authorising the $230 million purchase of the Majestic Centre in Wellington & North City shopping centre in Porirua, and authorising the issue of shares to Kiwi.

The remaining resolutions are to remove directors Tony Sewell & Jim Sherwin, leaving Carol Campbell as the one remaining member from the existing board, and appointing Augusta nominees Allen Bollard, Bruce Cotterill & Paul Duffy.

Tony Sewell.

Mr Sewell, former chief executive of Ngai Tahu Property Ltd, joined the NPT board last August and replaced Sir John Anderson as chair on 17 March. Sir John had headed the board for 6 years.

Mr Duffy, former DNZ Property Fund Ltd (now Stride Property Ltd) chief executive & executive director, joined Augusta’s board last November and took over chairing it in December.

Assuming support for the Kiwi deal, those board changes would be an off-the-wall extreme. NPT’s board saw this as a proposal in Augusta’s own interests.

Management contract offers

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 for $3.5 million and, because of the NPT board’s resistance, replacing the 3 directors.

In December, Kiwi came to the NPT board’s rescue with a proposal to inject 2 of its properties, becoming a cornerstone shareholder, also buying out the management contract, but leaving the NPT board intact for the moment though with a succession plan.

The management contract buyout will cost Kiwi $6 million. Either party can terminate the management agreement after 5 years on payment of a termination fee to Kiwi.

In yesterday’s meeting announcement, Mr Sewell said externalising management wasn’t the NPT board’s preferred position, because the company only internalised it in 2010, but it was an integral part of Kiwi’s proposal: “After taking into account the benefits that a strategic partnership with Kiwi Property is expected to provide to NPT, the appointment of Kiwi Property as manager of NPT & its property portfolio on the terms negotiated with Kiwi Property is acceptable to the board, particularly as the management agreement includes the right for NPT to terminate.”

Mr Sewell said NPT & Kiwi had finalised terms and entered into conditional agreements to give effect to the proposal. Mr Sewell said: “The NPT board supports the Kiwi Property proposal, which it considers to be a transformational transaction that would reposition NPT with the scale & resources to best serve its shareholders’ interests into the future, and unanimously recommends shareholders vote in favour of the proposal.”

Mr Sewell said the Kiwi deal was expected to increase NPT dividends for the March 2018 year by 7%, pro forma.

He said the terms of the entitlement offer hadn’t been determined yet, but expected NPT would send an offer document to shareholders in late April.

Assessment of Augusta proposal

Although the Augusta proposal is no longer before shareholders, NPT included an assessment of it in its notice of meeting.

The NPT board said the Augusta proposal:

  • would result in a significant decline in NPT’s earnings & dividends relative to its projected earnings & dividends on a standalone basis (this compares to an expected increase in earnings & the level of dividends for the 2018 financial year under the Kiwi proposal relative to NPT on a standalone basis)
  • was highly reliant on an increase in NPT’s gearing position (total debt:total assets) to a level higher than under the Kiwi proposal in order to achieve any enhancement in earnings or dividends for shareholders compared to the expected position for NPT for the next financial year, and
  • the properties to be acquired under the Augusta proposal are lowrise Auckland office buildings with the majority of the rent received from single tenants. The board was concerned that the low yields offered by the buildings did not take into account longer-term tenancy risks and provided NPT with no real options in the event of increases in interest rates
  • NPT would be insufficiently compensated for selling effectively perpetual management rights to Augusta. The payment proposed by Augusta was the lowest under the proposals NPT received
  • there is potential development risk associated with the Augusta proposal, with construction of one of the 3 properties to be acquired having only just started (this property would represent about 28% of the NPT portfolio by value post-transaction on a pro forma basis)
  • the properties to be acquired under the terms of the Augusta proposal were not owned by Augusta and Augusta did not necessarily have direct control over them, thereby introducing significant transaction uncertainty relative to the Kiwi proposal, and
  • the amount of additional debt & equity capital required by NPT under the Augusta proposal was significantly more than under the Kiwi proposal. There would therefore have been substantially greater execution risk under the Augusta proposal.

NPT has called the special meeting for Friday 21 April (11am at Link Market Services Ltd, Deloitte Centre, 80 Queen St).

Kiwi weighs in with support for deal

Kiwi Property also stated its own view yesterday on how the 2 listed companies would progress their relationship. Kiwi chief executive Chris Gudgeon said: “The partnership proposal will align the interests of the 2 listed property companies and provide a clear pathway to grow value for both companies. The proposal has the potential to deliver NPT shareholders with an immediate lift in earnings and increases NPT’s scale & relevance, positioning the company to grow & prosper.

“Our proposed management agreement with NPT is best in class and offers NPT shareholders an ability to terminate the agreement without cause, if they should ever deem this to be in the best interests of the company, at some point in the future.

“Kiwi Property’s interests will be aligned with NPT shareholders’ through its 19.9% shareholding in NPT and we will be strongly motivated under the terms of the management agreement to perform for NPT shareholders.”

Kiwi chair Mark Ford said: “This partnership proposal is a logical opportunity to create further value for our shareholders by using our existing property & funds management platform to generate additional management fee income.

“We will retain an interest in North City shopping centre & the Majestic Centre through our shareholding in NPT, and the proposal also serves to release capital which we can use to fund our planned expansion of Sylvia Park shopping centre.

“If we receive the support of NPT shareholders to our proposal, we can help drive NPT’s future investment performance by using our specialist management capabilities to intensively manage their assets and by seeking investment opportunities that create further value for NPT shareholders.”

Earlier stories:
27 March 2017: Kiwi proposal for NPT finalised “in next few days”
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: NPT & Kiwi releases, proposal documents.

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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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