By Campbell McIlroy
Friday 22nd September 2000
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Papers were filed in the High Court at Wellington on Tuesday.
Whangarei accountant and investor Brian Moyle said the objectors included at least one shareholder in each of the 27 companies in the merger, including one shareholder with shares in 17 of the companies.
Mr Moyle said the merged company could leave original shareholders in an investment which fundamentally differed from what they had originally subscribed to.
The dissenting share holders wanted to be paid out, based on the valuations Waltus used for the merger proposal, Mr Moyle said.
Counsel for the group, Hamish McIntosh, of Russell McVeagh, said ideally those in the successful syndicates would not want the merger to go ahead, but the best option would be for Waltus to buy them out.
He said it was likely more investors would join the group once the challenge became public knowledge.
About 10% of shareholders voted against the merger. If they all joined the action, and assuming they held 10% of the company's shares, the payout could cost Waltus $22 million.
Analysts suggested this could overburden the merged companies with debt and call its viability into question .
A preliminary hearing has been set down for September 25 in the High Court at Wellington.
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