Independents hold out

By Chris Hutching

Friday 18th October 2002

Ngai Tahu Holdings Corporation has raised its takeover offer for the remaining 18% of shares in Shotover Jet it does not own from 60c to 70c and will include a 1.25c a share dividend, but independent director David Stock is holding out.

Mr Stock and and another independent director, Ross Keenan, have been negotiating over the past fortnight with Ngai Tahu to raise the offer as it is still well short of the 82-94c range identified by an independent report by Grant Samuel and is considered not fair.

Mr Stock owns 150,000 shares, making him the fifth-largest shareholder on the register. He plans to hold on to his shares as he believes earnings going forward are sustainable.

In a letter to shareholders, Ngai Tahu says the 70c a share offer is a 53% premium over net tangible asset backing as at June and a 40% premium on the trading price of 50c a share before the takeover notice.

Ngai Tahu notes risks surrounding the company business it may lose its five-yearly renewal of river rights, intangibles make up a significant portion of assets and poor performance has delivered a loss of $8.9 million over the seven years.

Dividends for the period amounted to $2.1 million or 5.75c a share.

Significant reinvestment of future profits will be necessary for the company to maintain its market position, Ngai Tahu says.

The month average price of shares lately has been 48c a share, reflecting the volatile tourism industry

The offer is open until November 7.

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