ARH gives more time for Ports share offer

Auckland Regional Holdings, the investment arm of the Auckland Regional Council, yesterday extended its $8-a-share takeover offer for Ports of Auckland by two weeks.

And more extensions are expected.

ARH already has 85.11 per cent of New Zealand's largest and busiest port and wants to get to 90 per cent - the level that allows compulsory acquisition of the rest.

The offer was initially due to close on June 3, and was extended last month to June 17. Now it will close on July 1.

The offer price was not increased and other terms and conditions are unchanged.

An analyst who did not want to be named said at least one more extension was likely.

ARH could then declare the offer unconditional and investors holding out would realise the game was up.

Even if ARH called off the offer and later made a new bid, it would be most unlikely to offer more than $8 per share. It could then just "creep" until it got 100 per cent.

"The reality is this is not about [people waiting for] $8.05 or $8.10, they want $10," the analyst said.

ARH chief executive Peter Casey said the offer was making "good, steady progress". He said the remaining shares were quite dispersed, owned by "lots of little people", who were just getting to grips with the offer.

The port company's independent directors' committee has decided not to recommend whether shareholders should accept.

A report by independent valuer Grant Samuel valued the shares at $7.68 to $8.55, which included a premium for control. They closed yesterday down 3c to $7.92, having ranged from $6.45 to $8.02 in the past year.

The carrot for ARH's bid for full control is thought to be the port company's investment property land bank, which Grant Samuel valued at between $170 million and $197.5 million.

Asked if ARH would consider leasing the port operation to the likes of Australian transport operator Toll, Casey said that was a decision for the port's board and management.

Grant Samuel valued the port operations at between $735 million and $795 million.

An analyst said ARH did not exercise power when it owned 80 per cent so probably nothing would change when it had 100 per cent. "That's why the outlook is not great for the company - the same people will be in charge."

He described Grant Samuel's financial projections for the port company as "ugly".

Container volumes were projected to grow at 5 per cent a year until mid-2007 and then at 6 per cent a year. Fonterra dairy export volumes were expected to grow at slightly slower rates.