KEY POINTS:
Four years after listing Kidicorp on the sharemarket, chief executive Wayne Wright says he wants to privatise the company because he doesn't need shareholders' money or their demands for dividends.
Positive Educare - a subsidiary of the Wright family's Mitchell Investment Trust - is offering 24c a share in cash for all stock in the listed childcare operator. Wright already holds 54.6 per cent of the company after a partial takeover last year.
Kidicorp went public in 2003 through a back-door listing into gambling software venture Feverpitch International.
Wright said listing on the NZX had not met expectations and the reasons for going public had evaporated.
Listing had seemed like a good venue for raising capital for expansion, but "the world's changed since then and now banks are awash with money. It's easy to borrow ... without diluting your capital."
Shareholders had also asked about dividends but the company needed to retain profits for growth, he said.
"Making money in this sector and producing dividends for the shareholders ... I just don't see that as being possible. So I thought I'd give the shareholders an opportunity to exit.
"If they choose to exit, fine; if they choose not to exit that's fine also but I won't feel like there's any necessity to provide dividends for them going forward 'cause I'm giving clear warning now it's a tight market - I just can't see how there will be dividends."
The offer price of 24c a share was a 30 per cent premium to the closing price before news of the offer and a 16 per cent premium to a volume-weighted average from the previous six months.
However, independent adviser Grant Samuel valued the shares at between 24c and 31.1c each, including a premium for control. Shares closed steady at 22c yesterday.
Wright needs to secure 90 per cent of shares to complete the full takeover.
Should the takeover fail he would stick with his 54.6 per cent holding.
Kidicorp's independent directors are preparing a recommendation for shareholders.
Wright said the firm's listing was intended to allow him to share his vision and provide him with an exit strategy by selling his shares.
"[But] it's clear that the market is so thin for Kidicorp stock that if I tried to sell a million shares the price would go through the floor and everybody would panic.
"What I've found since we've been in the public arena [is] that it's been impossible to satisfy the three major stakeholders - the teachers, the parents and the shareholders.
"The teachers are always wanting higher wages, the parents are always wanting lower fees and we're starting to get pressure now from the shareholders wanting dividends."
Takeover
* Kidicorp is a listed early childhood education provider.
* It provides care for 6000 children at 78 centres.
* The company employs more than 1500 people.
* Positive Educare is bidding 24c a share.
* Kidicorp has an independent valuation of 24c to 31.1c a share.
