NPT appoints Northington Partners to consider Augusta proposal

Monday 14th November 2016

Property investor NPT has appointed Northington Partners to consider a planned transaction put forward by minority shareholder Augusta Capital, as well as other alternative options.

Augusta took a 9.3 percent stake in NPT in September in a deal with the Accident Compensation Corp, buying shares at 73 cents, above the then market price of 64 cents. It then proposed a deal to NPT management in which it would buy the company's management contract and facilitate a $329 million acquisition but was rebuffed.

In October, it told the NZX it was seeking a special meeting of shareholders to dump chairman John Anderson and directors Jim Sherwin and Tony Sewell, replacing them with its own chairman, Paul Duffy, and independents Bruce Cotterill and Allen Bollard. Augusta would also use the forum to put the proposal in front of the property group's shareholders.

Augusta wants NPT to buy three office buildings, one of which is under construction, worth a combined $329 million at the net tangible asset price in an uncontested process and would support a $185 million issue of new equity to help buy the assets. Augusta also wants to buy NPT's management contract for $3.5 million, a premium to the $2.5 million paid to internalise it in 2010, with an initial five-year term and automatic right renewal.

In a statement to the NZX on Monday, NPT said Northington Partners would consider whether Augusta's proposal is in the best interests of the company and all its shareholders when considered against alternative proposals that have been received. These alternative proposals are also being reviewed by Northington.

The board of NPT said "preliminary advice to date is that the Augusta proposal may not provide the best option for the company and its shareholders compared to other proposals received". The process of considering alternative options to be considered by shareholders is expected to take around six weeks.

A notice of meeting is expected to be sent to all shareholders in January 2017, with the meeting held in February.

Shares of NPT were unchanged at 69 cents and have risen 16 percent in the last 52 weeks. Shares of Augusta fell 3.9 percent or 4 cents to $1 and have risen 12 percent in the last 52 weeks.

BusinessDesk.co.nz

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