Decision on Ports takeover offer left to minority investors

Ports of Auckland independent directors are leaving it up to minority shareholders to decide if a takeover offer by the Auckland Regional Council is a good or a bad deal.

Auckland Regional Holdings, the investment arm of the regional council, is offering $8 a share for the 20 per cent of the port company it does not already own.

The offer values New Zealand's biggest port company at $848 million.

The remaining shareholders, many "mum and dad" investors through retail managed funds, have been told by company chairman Neville Darrow that the independent directors' committee had decided not to make any recommendation.

The directors decided the offer, which closes on June 3, was fair but might not be reasonable.

A report to shareholders by independent valuer Grant Samuel & Associates valued the company at $7.68 to $8.55 a share.

This value range included a premium for control, so the offer could be considered "fair", independent directors said.

But it may not be "reasonable" because potential synergy benefits to ARH from 100 per cent control were not provided for in the offer price.

Ports of Auckland shares closed up 5c at $7.96.

The report valued the Ports' landbank, considered by analysts to be the treasure the council is seeking, at $170 million to $197.5 million.

ABN Amro ports analyst and head of research James Miller said the no recommendation was "slightly unusual".

He said the valuation range gave a level of uncertainty.