Choice for Shotover shareholders

Shotover Jet's independent directors have given shareholders mixed advice on whether to accept the latest takeover offer from majority shareholder Ngai Tahu Holdings.

Ngai Tahu, an 82 per cent stakeholder, has made a revised offer of 70c per share, plus the previously announced dividend of 1.25c per share. Grant Samuel valued Shotover, an adventure tourism company, at 82cps to 94cps, and deemed the Ngai Tahu offer as unfair.

But in a letter to shareholders, the independent directors noted that there was a risk that if the offer did not reach the compulsory acquisition threshold of 90 per cent, the company's current share price of around 70c could slip anyway.

If the offer did not succeed and Ngai Tahu continued to pursue all the shares, it would either have to make another offer or seek total control through "creep" provisions which allow a major shareholder to purchase up to 5 per cent of shares a year.

Once over the 90 per cent threshold, it could then purchase the rest of the shares at a "fair value" price fixed by an independent assessor which might not come to the same price range as Grant Samuel.

The directors, some of whom are selling their shares, advised shareholders not to accept the offer if they wanted to stick with the company's improving fortunes, but only if they realised the risks.

"The independent directors consider that the improvement in the financial and operational performance of the company is sustainable," they said.

- NZPA