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Strong NZX start nets CEO $3m

By Nick Stride

Friday 6th June 2003

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Wednesday's debut for trading in NZX (New Zealand Stock Exchange) shares made Mark Weldon a $3 million man on paper but the exchange chief executive has a lot more hard work to do before he can cash in.

Mr Weldon's contract entitles him to a 5% stake in the company, with 1% being dished out in each of the next five years.

The stake will be calculated after the one-for-two rights issue and a $10 million public offer, giving Mr Weldon almost 700,000 shares. At the peak $4.50 price on the first day of trading that was worth $3.1 million. The issue price of his shares will climb each year by the company's cost of capital.

The strong start to trading appeared to have caught the exchange's bosses and its sharebroker advisers by surprise.

The indicative price range for the public share issue was set at $2.50-3.25 but the exchange isn't bound by that. The final price, to be announced on June 23, will take into account trading prices until then, indications from institutional investors and valuation advice from the "valuation advisers" ­ ABN-Amro Craigs, ASB Securities, First NZ Capital and Forsyth Barr, among other things.

Among those benefiting from the shares' strong performance are Guinness Peat Group, with a 2.7% stake pre-rights and public issue, GPG director Tony Gibbs with 0.4% and various directors of ABN-Amro Craigs, which was a heavy buyer of the rights on Wednesday.

The reason for GPG's interest is unknown but a takeover is out of the question, for now at least. NZX's constitution restricts any one shareholder to a 10% holding.

The same restriction has also been enshrined in legislation by the government.

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