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Kerr accelerates Pyne Gould takeover bid; questions hang over Epic contract

Tuesday 1st November 2011

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Pyne Gould Corp cornerstone shareholders George Kerr and Baker Street Capital are speeding up their $47.2 million bid to seize control of the company, and will sent out their takeover documents in a couple of days.

The wealth manager that divested its stake in lender Marac earlier this year will send its appraisal report and target company statement separately from the offer from Kerr’s Australasian Equity Partners Fund. Pyne Gould’s independent directors Bryan Mogridge and Bruce Irvine are advising shareholders not to sell before receipt of the offer.

Kerr and Californian hedge fund Baker Street hold about a third of Pyne Gould, and are offering 33 cents a share to mop up the rest in a deal that’s been called a ‘low-ball offer’ by some commentators.

Last week, Pyne Gould chairman Mogridge stepped down from the board of lender Heartland New Zealand, of which the wealth manager holds a 6 percent stake, and yesterday he stepped down as a director of Torchlight Investment Group, one of Kerr’s investment vehicles, according to Companies Office documents.

Pyne Gould also said the takeover may impact on subsidiary Equity Partners Infrastructure Management’s (EPIM) contract to manage Equity Partners Infrastructure Co No 1 (EPIC), and it intends to raise the matter with Australasian Equity Partners.

The EPIC management contract netted almost $1.6 million in fees in the 12 months ended March 31, and in July Pyne Gould took a $14 million stake in a National Australia Bank loan to EPIC to prevent a likely default and help the orderly sale of its assets. Pyne Gould bought the asset manager from Kerr for some $18 million in 2009.

The company is holding its annual meeting today in Christchurch.

The shares were unchanged at 32 cents in trading today, and have shed 26 percent this year.

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