Canadian fund moves on Vital Healthcare

Canadian investor NorthWest Value Partners may buy more Vital Healthcare units having today disclosed a 10% holding in the NZX-listed property trust.

Speaking from Toronto, NorthWest chairman Paul Dalla Lana said the acquisition was a simple investment for the moment but the fund may acquire further units depending on the market and other conditions.

“We’ve sort of been watching the Vital situation for a while and we like the business and we like the people involved so it seemed like a good time to make an investment,” he told NBR.

NorthWest has acquired 28.1 million units in Vital since October 19 making it the top unitholder ahead of Vital’s management company's parent, ANZ, which has approximately 9%.

Interestingly, both NorthWest and ANZ bought the bulk of their units from Crown financial institution ACC, which has now sold out completely having earlier agitated for a low cost solution to internalising the trust’s management contract.

ACC sold its remaining 16.56 million units to NorthWest for $19.8 million, having earlier sold 12 million to ANZ-subsidiary AUT Investments for $14.34 million in late September.

The internalisation issue is now on the back burner after ANZ-owned OnePath called off talks with Vital’s independent directors after failing to reach an agreement over the price tag for the contract, which earns about $3 million a year.

OnePath initially wanted $14 million, but came down to $8 million after pressure from institutional investors. But it did not seem prepared to bow further to the $6 million proposed by Vital’s independent directors.

ACC and other institutions were pushing for even less and groundwork was being laid to try and vote the trustee into dumping the manager for no cost.

However, that idea appeared to be gazumped when ACC sold out to ANZ, leaving the manager in a much stronger position with a blocking stake to any unitholder action.

Mr Dalla Lana said NorthWest was still forming an opinion on the internalisation debate.

NBR has a more detailed interview with Mr Dalla Lana in tomorrow’s print edition.