DNZ to proceed with Argosy court action

DNZ Property chairman Tim Storey said his company and supporting unitholders will go ahead with planned legal action to force a meeting of Argosy Property Trust.

Earlier today, OnePath, the owner of the external manager of listed Argosy, released a new proposal to internalise the management that reduces the amount it is seeking from $32.5 million to $20 million.

Mr Storey described the price reduction as “interesting”

“They seem to keep changing what’s a fair and reasonable price to be able to reduce the figure from $32.5 million to $20 million.

DNZ is offering an alternative plan to merge Argosy with DNZ and take over management.\

It is seeking a court order to force a meeting ahead of the planned Argosy meeting in August where unitholders will consider OnePath’s offer.

Mr Storey the DNZ meeting will seek information about the existing management arrangements and call for a “truly independent” report. 

Grant Samuel has been commissioned to provide an independent report by the independent directors of the Argosy management company.

Mr Storey questioned how independent the report really was given comments already in the market.

In any case, OnePath had failed to address the main concerns about governance of Argosy. He cited the reduced rights of unitholders to call meetings and seek binding resolutions under a trust structure.

He claimed that the OnePath proposal would essentially still leave Argosy with an external management team under a convoluted structure. The OnePath plan did not propose corporatising the trust and putting its unitholders on an even footing with other listed companies, albeit Stock Exchange listing rules required a greater level of unitholder consultation by listed trusts, Mr Storey said. It was merely a way of installing

OnePath’s existing management team and providing OnePath with an exit payment.

Meanwhile, one of the independent directors of Argosy’s manager, Peter Brook, told NBR that the additional meeting being called by DNZ was unnecessary, costly, and complicated matters.

He claimed there were ”massive” hidden costs in DNZ’s proposal, which he described as a “takeover”.

“All resolutions will be put to unitholders at the annual meeting we will hold in August,” Mr Brook said.

OnePath, director John Body, said that although the original $32.5 million proposed fee for internalisation reflected the underlying commercial value of the management contract, directors had renegotiated the proposal in good faith, following feedback from unitholders and input from advisers.

ACC had led the charge on behalf of unitholders, Mr Body said.

OnePath discussions with ACC and other unitholders and the new offer reflected the views that had been aired.