Capital chase heats up

Chris Gudgeon heads a real-estate business that’s proving most popular. Picture / Mark Mitchell

The tussle over listed landlord Capital Properties became more intense yesterday as the AMP Property Portfolio headed towards building a stake to rival Kiwi Income Property Trust's 19.9 per cent.

Wellington-based Capital is a $536.6 million real-estate vehicle headed by Chris Gudgeon.

Stephen Costley, the general manager of AMP Property Portfolio, said sharebroker First NZ Capital had been instructed to buy Capital shares from yesterday until the end of trading tomorrow.

The offer to pay $23.3 million for just over 7 per cent of Capital was subject to AMP getting acceptances for a minimum of 10.12 million shares - or a 4.2 per cent stake - within three days.

By yesterday evening, the company had passed the 4.2 per cent mark - at a cost of $13.7 million.

It already had a 10 per cent stake.

AMP is paying $1.35 a share compared with the Monday close of $1.26.

Costley said the offer was "an exploration for the appetite on the sell side".

"We're having a look to see if there are any shares there. I'd like to grab some more stock if it's available."

In March, AMP paid the same price of $1.35 a share in spending $31 million for its initial 10 per cent stake, which blocked the possibility of Kiwi making a full takeover bid.

A full takeover requires 90 per cent acceptance.

Kiwi, a $1.2 billion rival real-estate investor, swooped to grab 19.9 per cent of Capital late last year.

Under New Zealand takeover rules, Kiwi cannot buy more shares without making a full or partial takeover offer.

Last year, trust chief Angus McNaughton refused to say why Kiwi bought its stake, but the purchase was soon followed by Capital putting its management rights up for sale. Capital later decided to abandon the sale plans.

In March, Costley refused to say why AMP had bought the initial 10 per cent, but said he was happy with the $1.35 a share price.

Yesterday, McNaughton was watching with interest.

He said the price of $1.35 was "very full" but Kiwi was not considering selling.