Overseas Vital deal has critics hopping

Sandy Maier of Ascot Property Trust. Photo / Steven McNicholl

Critics of NZX-listed medical landlord Vital Healthcare Property Trust decried yesterday's $11.5 million management sale saying the business should have stayed in New Zealand.

Sandy Maier of Ascot Property Management criticised the deal by ANZ's OnePath to sell Vital's management to Canada's NorthWest Value Partners.

"We are never happy to see management control of a New Zealand institution passed offshore. It didn't need to happen that way so we take no joy in that.

"We got into this because we felt the internalisation idea would be the best way to go so we will be very interested to see what OnePath/NorthWest will say about that at the annual meeting," Maier said.

Shane Solly of Mint Asset Management said the Canadian purchase ended a sorry saga.

"Vital investors have been put through the mill with unit holders carrying the costs of the corporate to-ing and fro-ing over the last 12 months with no benefit to unit holders. It's a sad day when Vital unitholders get hit with all the corporate costs associated with corporate activities and someone else walks away with $11 million-plus.

"It will be important to see what the Canadians bring other than money to the mix. Perhaps their global focus on healthcare-related real estate means they are better positioned to grow Vital profitably for all investors. It will also be important to understand if a 20 per cent stake in Vital's underlying units is enough.

"Importantly Vital's assets are reasonable and Vitals's underlying management are good," Solly said.

Investor Paul Markham called for the resignation of Vital's chairman and independent directors and said the deal was shameful and the second sudden management sale of the same vehicle - first to ING and now to NorthWest.

"This really stinks. Corporatisation or internalisation of Vital ain't never going to happen now," Markham said.

NorthWest said it had struck a binding and conditional agreement with OnePath (NZ), a subsidiary of ANZ, to buy Vital Healthcare Management for $11.5 million.

That follows months of agitation against the manager from institutional unitholders and Ascot although the big holders have since sold out.

NorthWest said it would provide employment offers to the existing management team under a separate agreement.

"Following completion of this transaction, NorthWest would hold an interest in approximately 19.8 per cent of the trust's units. The agreements are subject to required regulatory approvals. These conditions are expected to be satisfied by the end of 2011," the business said.

NorthWest said it would be making an address to unitholders at the Vital annual meeting.

* Vital Healthcare Property Trust's annual meeting is at 2pm today at South Stand, Eden Park, Auckland.

Taking the pulse

Vital Healthcare Property Trust:

* NZ's only listed medical/healthcare landlord.
* Portfolio valued at $513.9 million.
* 25 properties and 128 tenants.
* Real estate in NZ and Australia.
* Owns Ascot Hospital in Greenlane, Auckland.
* Owns Epworth Eastern Hospital in Box Hill, Melbourne.
Source: Vital Healthcare Property Trust