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Stock's stand right

By Chris Hutching

Friday 14th February 2003

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Shotover Jet's share price jumped 4c to 74c this week when it posted a strong interim result, vindicating independent director David Stock's view that a recent takeover offer by Ngai Tahu undervalues the company.

Ngai Tahu launched the bid last October but has fallen short of the compulsory acquisition threshold of 90%, with acceptances at 88%.

At the time of the bid Mr Stock warned that the bid price of 70c a share (a rise on the initial 60c-a-share offer) was at the lower range of the fair value assessed in an independent appraisal report that put the range between 82c and 94c a share. Mr Stock chose to hold on to to his 150,000 shares. He remains a director of the company and champion of the minorities.

Dunedin interests are understood to have driven a recent surge in share trading, eyeing opportunities from a possible full takeover offer by Ngai Tahu. Under takeover rules a subsequent offer requires a new and independent valuation for the shares, which would take account of the improved financial position of the company now revealed.

In spite of the strong financial recovery revealed in the interim report to December 2002 ­ profit 30% higher at $1.15 million on the back of strong traveller inflows ­ the directors have passed on a dividend and decided to reinvest the surplus in a guided-tour operation and another jet-boat experience in Central Otago. Turnover during the period was steady at $11.8 million.

Mindful of the rapid effect that international events such as war may have on tourism, the board will make a final decision about a shareholder payout at the end of the financial year but sources close to the company said they would be disappointed and surprised if a final dividend was not declared.

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