Argosy directors 'open' to DNZ moves

The Meridian Energy building in Wellington is part of DNZ's property portfolio. Photo / supplied

Independent directors of the $900 million Argosy Property Trust continued their Mexican standoff against predator DNZ Property Fund, with holdings of just over $600 million.

But they did mention possible savings if the takeover went ahead.

Trevor Scott and Peter Brook said they preferred internalising Argosy's management contract.

DNZ wants to create a $1.6 billion fund by taking over Argosy. Scott and Brook have spurned them so far but that could change.

"We remain open to discussing future options with any party, including DNZ, subsequent to internalisation, should any such option be in the best interests of unitholders," Scott and Brook wrote to unitholders.

"We remain of the view that at this time a takeover by DNZ of Argosy is unlikely to be in unitholder interests, but we remain open to considering such an initiative in the future."

While a takeover might save costs, these were not expected to be significant and Scott and Brook could see no rush to progress discussions with DNZ.

An AGM proposal would allow unitholders to keep all the cost savings achieved from internalisation - "estimated savings pre-tax of $3 million per annum, net of financing costs of $1.2 million, rather than being shared as proposed by DNZ".