NPT shareholder meeting delayed as it negotiates with Kiwi Property
Negotiations between Kiwi Property Group and NPT over a property deal are progressing constructively but taking longer than expected, with a shareholder meeting now planned for April, NPT says.
In December, Auckland-based Kiwi Property put forward its plan to sell the North City Shopping Centre in Porirua and Majestic Centre in downtown Wellington to NPT for cash and shares worth $230 million, with NPT raising $100 million of new equity as well as a $50 million issue to Kiwi Property for a 19.9% stake to help fund the deal.
The plan won the backing of the target's board, trumping a rival bid by Augusta Capital, which took legal proceedings seeking orders requiring NPT to call a meeting of shareholders to discuss its bid but dropped its case in January with its proposal due to be heard at the shareholders' meeting. NPT said at the time it would issue a notice of meeting in February, with the meeting to be held soon after.
Today, NPT chairman Sir John Anderson said negotiations and other preparations for the shareholders meeting were "close to completion and a further update will be provided very soon" and the board expects the meeting to take place in April.
"Negotiations with Kiwi Property Group are progressing constructively, however, attending to the finer details of the management agreement, sale and purchase agreements and terms of the share subscription, as well as (the) arrangement of other funding for the transaction, is taking longer than initially expected," Sir John said. "It is critical that the board and Kiwi take the time to get this level of detail right, and for the board to ensure that it achieves the best possible position for NPT and the shareholders in the circumstances."
If the Kiwi Property transaction is backed by NPT shareholders, it would expand the company's portfolio to $400 million from $170 million, and more than double distributable income to $16.8 million by 2020 from $5.8 million in the 2017 financial year. That compares to the Augusta bid, which would increase NPT's assets under management to about $505 million, which Augusta estimates would more than triple net profit by 2020 to about $18.3 million.
NPT shares last traded at 63c, down 1.6% in the past 12 months, while Kiwi Property shares were at $1.42, up 2.2% in the year. Augusta shares last traded at $1.025, up 4.6% in the past year.