Feathers ruffled over Capital Properties dividends

Promises to overhaul Capital Properties' dividend policy have upset some investors but new owner AMP says nothing has been decided yet.

One Capital shareholder has laid a complaint with the Takeovers Panel, calling for it to protect the interests of minority investors.

AMP Property Portfolio general manager Stephen Costley told the Business Herald his unlisted entity had "no appetite for dividends" and was purely an investment vehicle.

But two men opposing AMP took his statements to signal the company's new board intended to axe its highly attractive dividend policy.

Mark Lister of ABN Amro questioned what Costley meant when he said AMP had no appetite for dividends. No company could withhold dividends from some shareholders and pay them to others, he said, asking if Costley was actually indicating AMP would partake in Capital's active dividend reinvestment plan.

Lister called for Costley to clarify his statements because they signalled an important aspect of the company's future. Yet no NZX announcement had been made on this point.

The only dividend details released so far showed AMP's intention to review the dividend policy but not to suspend it, Lister said.

Capital shareholder Claude Moffat, of Ellerslie, was also angry about Costley's statements, saying he was using "shocking" and threatening tactics aimed at trying to scare investors into selling to AMP.

He has laid a complaint with the Takeovers Panel about the statements, saying they breached the code because AMP is threatening to punish minority investors if they hold their Capital shares.

"I pay good taxes for this regulator to ensure the integrity of the market and this arrogant institution is taking the cream of our companies and acting in an abusive and arrogant fashion," Moffat said. Ill-informed investors might sell out but they should not, he said.

But Costley said he was merely being clear about AMP's intentions towards Capital and the new board would have to discuss Capital's dividend policy. He had made these statements to many people in the investment community, he said, emphasising that he had not said dividends would be axed, merely reviewed.

Capital's largest institutional investor, ING, backed Capital's management, although fund manager Shane Solly said his firm had "marginally" reduced its Capital holding from its former 5.3 per cent..

"Capital remains a solid property exposure with attractive assets. Since his arrival, [chief executive] Chris Gudgeon has actively managed the portfolio and we would like to see some of the opportunities Chris and his team are working on come to fruition." With AMP in control, ING would have an eye on potential changes to Capital's board, direction, property holdings and capital management, he said.