Merger caution hits Tauranga share price

Port of Tauranga's share price plunged yesterday after comments by Auckland Regional Council chairman Mike Lee which cast doubt on the proposed merger between Ports of Auckland and Port of Tauranga.

Around $20 million was wiped off the Port of Tauranga's market value with its shares closing down 15c at $5.85.

The ARC is the ultimate owner of Ports of Auckland and Lee told the Business Herald the local authority would accept only a merger deal that gave it at least a half share of the new company. He was responding to suggestions the proposed $1.6 billion merger would give the ARC a third of the new business and the remaining two-thirds to the Environment Bay of Plenty regional council and private Port of Tauranga shareholders.

Meanwhile, Auckland Regional Holdings (ARH) - part of the Auckland Regional Council Group - said in its annual report published yesterday that investing $170 million in the additional 20 per cent shareholding in Ports of Auckland was a highlight for the year to June.

Ports of Auckland delisted from the stock exchange last year after ARH launched a takeover bid for the 20 per cent of shares it did not already own.

The annual report valued Ports of Auckland at $797.4 million as at June 30. ARH also reported it made a return on assets of 10.6 per cent, with its asset base growing by $39 million to $1.42 billion, and provided $90 million of investment returns for infrastructure funding.