Sharechat Logo

Arm wrestle for Rural Equities

Rob Hosking

Friday 21st May 2004

Text too small?
The arm-wrestle is under way for control of Rural Equities.
St Laurence Equities confirmed this morning it is going after the rural property investor and manager, offering shareholders $1.50 cash per share.

Shareholders have previously been offered $1.25 from H&G Limited, a company owned by Sir Selwyn and David Cushing.

"We see Rural Equities as a fund manager but it's a manger of rural property. And that's right where our interest is," says St Laurence managing director Kevin Podmore.

St Laurence focuses mostly on property-related investments.
The firm is particularly interested in Rural Equities' ownership of a firm which managers the New Zealand Rural Property Trust, Podmore says.

Some investors in that trust - disappointed with persistent low performance - have called for it to be wound up, and Podmore does not rule that out, although he says there should be other ways of dealing with it.

"I suppose the challenge is to align the interests of the manager and the investors. The value for the manager is the ongoing management contract. "I don't have a firm view of this at the moment, but maybe there's an opportunity to restructure the contracts so as to create an incentive to manage in a way that creates more value for investors."

Unlike the H&G bid, St Laurence, which is a partial takeover attempt, Podmore says St Laurence is bidding for all the shares.

"While St Laurence would prefer to own 100% of Rural Equities, the offer is not conditional on all shareholders accepting our price of $1.50 per share. We would be content with a shareholding of at least 50.1% in Rural Equities and would be long-term investors in the company."

The bid is partially based on an assessment by PriceWaterhouseCoopers late last year which concluded that fair value of the shares, for a controlling interest, would be between $1.30 and $1.69 per share, with a mid-point of around $1.49 per share.

Podmore says Rural Equites has been under-performing for some time, with units trading at an average of 43% below the PWC figure.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

EXPRESSION OF INTEREST IN THE SUPPLY OF MEREENIE GAS
IPL - FY24 Annual Results
CEN - Contact to revisit Wairākei development options
May 17th Morning Report
PaySauce to announce full year results on 22 May 2024
BGP - Results of Briscoe Group Limited Annual Shareholder Meeting
Judith Swales to leave Fonterra
Fonterra announces step-change in strategic direction
USX Trading Results 15th May
Devon Funds Morning Note - 15 May 2024