By BRIAN GAYNOR
eVentures
Craig Heatley's proposed purchase of 64 per cent of eVentures is a stark reminder of the cosy, self-serving deals that are a common feature among companies listed on the New Zealand Stock Exchange.
Last year, eVentures issued 160 million shares to eVentures Partnership (a United States-based joint venture between the Japanese company Softbank and epartners) and 40 million shares to parties associated with Mr Heatley. These 200 million shares cost 15c each.
In a blaze of hype, 50 million additional shares were then issued at 60c each to the public (35 million) and Telecom, Todd Capital and The Warehouse (5 million each).
When the float was criticised for having no restrictions on the sale of shares by the major shareholders, Mr Heatley wrote to the Business Herald: "Representatives of eVentures Partnership (Softbank and epartners) have made it very clear on a number of occasions that they have no intention of divesting their interest in eVentures NZ."
On Monday, Mr Heatley gave notice of a proposed transaction whereby he will buy eVentures Partnership's 160 million shares in a range of 14c to 16.8c per share. This compares with eVentures net tangible asset backing of 21c a share, mainly in cash, on December 31.
Why is eVentures Partnership selling out well below cash asset backing?
Does Mr Heatley have any share agreement with eVentures Partnership?
Why didn't the US-based joint venture offer these shares to minority shareholders?
Did Mr Heatley make any attempt to have these shares made available to minority shareholders?
If the 160 million shares had been made available to minority shareholders at 15c each it would reduce their average cost to 25.7c a share. This would go a long way to compensate for the dismal performance of eVentures under Mr Heatley's stewardship before he went overseas.
Trans Tasman Properties
The cheeky attempt by Hong Kong-based Sea Holdings to take over Trans Tasman Properties through the back door was rejected by shareholders on Monday.
Investors are now more interested in the future direction of the beleaguered group, particularly with developments that might enhance shareholder value. In this regard there are several options:
* Trans Tasman Properties could be liquidated in full or in part and the proceeds returned to shareholders. Executive chairman Don Fletcher said that this proposal had been put to Sea Holdings but was flatly rejected by the 54.8 per cent controlling shareholder.
Mr Fletcher gave the clear impression that Sea was totally in control and would always act in its own best interests.
* Trans Tasman could come back with a revised offer and Mr Fletcher said the board would consider this and look at making any new offer voluntary.
* An improvement in the commercial property market. The executive chairman said the Wellington market had improved and Auckland seemed to have bottomed. He gave a cautious, but slightly optimistic, view of commercial property market prospects.
* The board appoints a new senior management team. This is unlikely because the group's two most senior executive directors are associated with Sea Holdings.
Shareholders at least have the comfort of knowing that Guinness Peat Group, Boston-based Grantham Mayo Van Otterloo and several other major institutions voted against the takeover resolution and want to see the group's overall performance improved.
But another issue, the sale of the management contract of its Australian operations, indicates that Sea will continue to hold an iron grip over Trans Tasman Properties.
In April 1989 the company, then known as Robt. Jones Investments and with total assets of $1.46 billion, bought its management contract from the private interests of Sir Robert Jones for $75 million.
In June last year Australian Growth Properties, which is 50.2 per cent owned by Trans Tasman Properties and has total assets of $A540 million ($670 million), sold its management contract to Sea Holdings for just $A350,000. The transaction, which was not subjected to shareholder approval, will reduce AGP's costs according to independent directors.
It is still difficult to understand how companies in the Trans Tasman group can purchase one management contract for $75 million and sell another for just $A350,000, yet both deals are supposed to be in the best interests of minority shareholders.
Richina Pacific
Richina Pacific shareholders had plenty to smile about after a well-organised annual meeting last week.
The company has had a rocky ride since Richard Yan and his consortium of wealthy American investors purchased 50.9 per cent of the company, then known as Mainzeal, for 28c a share in March 1995. Shortly afterwards Richina made a full takeover offer for Mair Ashley. This brought together a strange mix of construction, leather and venison.
The group expanded into China but results were unsatisfactory and following two rights issues and a one-for-five share consolidation, the average entry cost of Mr Yan's consortium is now $1.42 a share.
But Richina may have turned the corner. The group reported a net profit of $4.7 million for the December 2000 year and the chief executives of its four divisions the Beijing aquarium, Shanghai Richina Leather and the New Zealand leather and construction operations (the company's venison activities were sold last year) gave informative and relatively upbeat addresses at the meeting.
Although Richina Pacific has a high level of debt, has yet to earn serious money in China and may sell its profitable New Zealand leather operations, its shareholders have good reasons to expect brighter days ahead.
* bgaynor@xtra.co.nz
<i>Gaynor on Wednesday:</i> Bid for eVentures stake has a cosy ring
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