Herbert suing Vital after ditched partial takeover: Vital wants $214,000 from marina owner

Simon Herbert's Emprie Capital company owns Bayswater marina.

An associate of Simon and Paula Herbert’s Auckland marina and dredging business Empire Capital is suing NZX-listed fibre business Vital after a ditched partial takeover in August but Vital says it’s done nothing wrong and wants $214,000 back.

Simon Herbert, an Empire director, said Empire Technology is claiming misleading and deceptive conduct and failures to make proper disclosure in breach of the Financial Markets Conduct Act, the Fair Trading Act, the Takeovers Code and the NZX Listing Rules.

“This action arises from Vital’s failure to inform the market about material information that would have critically influenced Empire Capital’s decision to pursue a partial takeover offer,” he said.

Vital’s NZX statement yesterday said it was “very confident that it has complied with its relevant obligations, strongly rejects Empire’s claims and will strenuously defend the High Court proceedings”.

“Vital is also committed to progressing the reimbursement of its takeover expenses, in the interests of all shareholders. Vital believes that issue should be determined by the Takeovers Panel, as the Takeovers Act provides, and will request the panel to make its determination as soon as possible rather than delay for the outcome of the High Court proceedings.”

In August 2024, Empire said it wanted 50.01% of Vital based on publicly available information at that time.

Empire alleges subsequent revelations indicated that Vital had not disclosed key developments, including:

• Financial performance shortfall: “Vital significantly underperformed its adjusted net profit after tax forecast for the financial year 2024. Vital’s forecast issued to the market in February 2024 was $400,000 to $700,000, and the actual adjusted profit disclosed in its annual report was $253,000;
• Major client loss: “Hato Hone St John, Vital’s largest customer, responsible for $3.7m of revenue, is expected to migrate its mobile radio telephony service requirements to the government’s new public safety network, upon contract expiry in 2027. The loss of this revenue is clearly material to the future performance of Vital,” Empire claimed.

Herbert said he wasn’t happy about suing Vital.

“We are disappointed to have had to issue these proceedings, but this matter has left a sour taste in our mouth,” Herbert said.

Had Vital disclosed these key issues to the market, Empire would not have proceeded even to this point with the proposed partial takeover, and wasted our time and resources, and that of Vital’s and others involved in the market.

The rules and code were designed to prevent exactly this sort of behaviour, he said.

Vital chairman John McMahon denied any wrongdoing and indicated a strong defence was being mounted.

Vital wants $214,000 from Herbert’s business.

“Vital provided Empire with an invoice for its properly incurred expenses in September amounting to $214,814 plus GST but, since then, Empire has refused to pay any of those expenses or acknowledged or accepted that any of those expenses were properly incurred. Accordingly, last week Vital made a formal request for the Takeovers Panel to determine the amount of expenses that Empire must reimburse to Vital,” the statement from McMahon said.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.