Vital Healthcare manager sells contract to Canadians

OnePath, the manager of listed Vital Healthcare, has sold its rights in a move that undercuts untiholder attempts to sack the manager at a meeting tomorrow.

The external manager, ANZ subsidiary OnePath (NZ), said it had entered into a conditional agreement to sell its management business and related companies to Canadian- based NorthWest Value Partners Inc (NorthWest) for $NZ11.5 million.

NorthWest will also buy 26,100,587 units (a 9% stake) in the trust from AUT investments, another subsidiary of ANZ, at $1.20 per unit. NorthWest already has an interest in approximately 10.8% of the trust units. The new purchase will give Northwest significant control over Vital.

NorthWest will offer employment to the existing management team of OnePath.

The agreements are subject to regulatory approvals.

Just two weeks ago the independent directors of Vital Healthcare directors reiterated their opposition to sacking, OnePath, as sought by some unitholders.

They issued a statement ahead of a special meeting on December 6 where unitholders were due to consider the future of the external management contract held by OnePath.

The independent directors refused to put forward an alternative management proposal from Ascot Property, claiming it would constitute a breach of the Securities Act.

In a notice of meeting for December 6 the directors said they would put a resolution from four shareholders representing 15% of the units that challenge OnePath’s continued management.

Those unitholders include Accident Compensation Corporation The Guardians of New Zealand Superannuation, Westpac Banking Corporation and BT Private Selection.

A second resolution from these unitholders opposes a payment to OnePath to quit the management contract for $14 million.

“ANZ National is essentially asking unit holders to pay it $14 million in order to ensure that in the future Vital Healthcare will be managed in the best interests of unit holders,” according to an explanation provided by the unitholders.

“Unit holders should not have to pay $14 million to achieve this outcome, because it is already a fundamental right to have Vital Healthcare managed in their best interests.

“The proposal that Vital Healthcare pay $14 million to terminate the current management arrangements represents an implicit admission that it is in the best interest of unit holders for the manager to cease to hold office.

It is unclear what the latest developments with NorthWest will mean but the directors of Vital are expected to come under close questioning at the meeting tomorrow.