Around the traps

Friday 17th May 2002

Latest bid for Newmarket ups ante

National Property Trust's surprise offer for Newmarket Property Trust units looks set to stymie Symphony Group's recent bid. Symphony director Colin Reynolds declined to comment mid-week. NPT's scrip bid of six of its units for every 10 units held by Newmarket unitholders values the offer at just under 57c a unit based on a 95c price of NPT units (which slipped to 93c this week). This compares with Symphony's earlier bid of "up to 51.6c" for just under 20% of the shares held by Newmarket's major shareholder, Sovereign (with a total 38% stake). Sovereign finance officer Richard Coon favours the NPT offer because it is more straightforward and offers synergies. The merger would also put the trust on the radar screens of fund managers because it would comprise about 4% of the property index when NPT's assets of $144 million and Newmarket's $80 million were combined. Mr Coon favoured an earlier merger attempt in 1999, which failed when Forsyth Barr withdrew support. NPT's offer is conditional on gaining 50.1% acceptance and on the purchase of Newmarket's management company. Sovereign would remain as a 16.25% cornerstone shareholder after the merger with NPT. Independent directors of NPT are commissioning an evaluation report. The offer will be delivered to Newmarket on May 20 and sent to shareholders on June 4, expiring on July 5.

Porirua retains whip hand

The Porirua City Council has agreed to a $6.5 million price for the sale of the strategic 246ha Aotea Block to Carrus Ltd to be settled in two years and adjusted if the time is earlier or later. The council turned down another $7 million offer because the developer's plans didn't suit. Mayor Jenny Brash said the land would be transferred to the preferred owner when a number of obligations had been met, including the preparation of a comprehensive development plan with public consultation and council approval. Ms Brash said the price was based on independent valuation advice. The council bought the land in two separate deals in 1998 and 2000 for a combined cost of $3.8 million.

Investment scheme under fire

A second property investment scheme is under fire from the Securities Commission and has also had its ads banned. On its website the commission says the scheme, Direct Buy, is part of arrangements for buying and selling residential property and is run by Auckland company Prometheus Management. The scheme targets potential sellers and buyers of property but the commission says the scheme appears to be designed to benefit buyers only. Direct Buy "claims to offer an investment scheme which will substantially reduce the costs for a buyer borrowing money by way of mortgage," the commission's website says. "It appears the vendor commits part of the proceeds of sale to an entity called The DeBeez Foundation Trust. It is said that this will complete the purchase unconditionally of the investment package which the vendors have 'sold' as part of the real estate transaction." The commission says the investment package appears to involve investment in projects in Australia operated by Barkworth Olives Management and Queensland Paulownia Forests. Both companies manage registered investment schemes in Australia. The commission says the Direct Buy investment scheme is subject to securities law and should have a registered prospectus and an investment statement. These are not available.
www.sec-com.govt.nz

Email any Traps items to cnikiel@nbr.co.nz

Comments from our readers

No comments yet