UPDATED: Lyttelton offer amounts to premium up to 14%, recommended by independent adviser

Lyttelton Port chief executive Peter Davie
Lyttelton Port 12-month price history (NZX.com)

UPDATED 10am: Christchurch City Holdings' offer to mop up the remaining shares in Lyttelton Port Co [NZX: LPC] amounts to a premium of up to 14 percent, according to a report from the independent adviser that recommends it be accepted.

Christchurch City Council's investment and infrastructure unit, which already owns about 79.6 percent of the port, has entered into a lock-up agreement with Port Otago for its 15.5 percent holding, and will offer $3.95 a share to mop up the remaining stock.  The offer includes Lyttelton Port paying a special dividend of 20 cents a share, for a total of $4.15. The stock last traded at $4.11.

A report from Northington Partners, commissioned by Lyttelton Port's in dependent directors, values the port company at between $3.35 and $3.65, with a mid-point of $3.50 and concludes that the "significant premium" may have been needed to win the support of Port Otago, which is needed to ensure the city's investment company can get to 100 percent ownership.

Northington says the likelihood of an alternative offer are "virtually nil."

Lyttelton is New Zealand's fourth-biggest port and the largest in the South Island, handling 6.56 million tonnes of freight in the year to June. That puts it behind Port of Tauranga, with 1.1 million tonnes, Northport on 8.8 million and Ports of Auckland on about 8 million tonnes, Northington said, citing government figures.

Last week Lyttelton Port reported a net profit of $343.2 million in the year ended June 30, swelled by a $328.2 million insurance payment. Underlying earnings, excluding the earthquake payments, were flat at $15.1 million, the lower end of its forecast range of $15 million to $16 million, as expenses rose faster than sales.

(BusinessDesk)


EARLIER 8am: Lyttelton Port board backs council takeover, will pay special dividend

The board of Lyttelton Port Co [NZX: LPC] has backed a takeover bid by council subsidiary Christchurch City Holdings, and will resolve to pay a special dividend to existing shareholders.

Christchurch City Council's investment and infrastructure unit, which already owns about 79.6 percent of the port, has entered into a lock-up agreement with Port Otago for its 15.5 percent holding, and will offer $3.95 a share to mop up the remaining stock. Having crossed the 90 percent threshold with the lock-up agreement, it can enforce Takeover Code provisions to compulsorily acquire the remaining shares.

The port's directors also resolved to pay a fully-imputed special dividend of 20 cents per share, provided certain conditions were met. The dividend is payable on Sept. 18 with a Sept. 16 record date.

"The board urges shareholders to do nothing in respect of the offer until they receive the target company statement (including the board's full recommendation) and the independent adviser's report," it said.

The announcement came after the close of trading, and the shares were unchanged at $4.11.

Last week Lyttelton Port reported a net profit of $343.2 million in the year ended June 30, swelled by a $328.2 million insurance payment. Underlying earnings, excluding the earthquake payments, were flat at $15.1 million, the lower end of its forecast range of $15 million to $16 million, as expenses rose faster than sales.

(BusinessDesk)

This article is tagged with the following keywords. Find out more about My Tags

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7745 -0.0033 -0.42%
AUD 0.9512 -0.0004 -0.04%
EUR 0.6331 0.0003 0.05%
GBP 0.4954 -0.0010 -0.20%
HKD 6.0047 -0.0278 -0.46%
JPY 92.4950 -0.0500 -0.05%

Commods

Commodity Price Change Time
Gold Index 1198.3 8.880 2014-12-18T00:
Oil Brent 59.3 0.110 2014-12-18T00:
Oil Nymex 54.4 -2.250 2014-12-18T00:
Silver Index 15.9 0.006 2014-12-18T00:

Indices

Symbol Open High Last %
NZX 50 5518.5 5545.0 5518.5 0.17%
NASDAQ 4752.6 4782.1 4748.4 0.36%
DAX 9901.3 9901.3 9811.1 -0.25%
DJI 17778.0 17874.0 17778.2 0.15%
FTSE 6466.0 6566.9 6466.0 1.23%
HKSE 23158.3 23189.6 22832.2 1.25%
NI225 17511.0 17621.4 17210.0 2.39%