Aussie has eye on NZ targets

Simon Pillar

Australia's Pacific Equity Partners yesterday highlighted forestry giant Carter Holt Harvey and fast food group Restaurant Brands among the many investment opportunities it is watching on this side of the Tasman.

Managing director Simon Pillar says Restaurant Brands, operator of Pizza Hut, KFC and Starbucks in New Zealand and Pizza Hut outlets in Australia, may complement its recently acquired Collins Food Group. Collins operates KFC and Sizzler restaurants in Australia.

He said: "We are not talking now, but there is a possibility. It is in a sector we believe we will be able to add value." He added that PEP, which has majority stakes in companies worth more than $2 billion, first had to bed down plans for Collins before it looked further afield.

Restaurant Brands shares plunged last week after PEP rival CVC Asia Pacific abandoned its $160 million takeover plans.

At the time, Restaurant Brands chief executive Vicki Salmon said other bidders might not run into problems and that there had been two "reasonably serious" interested parties from Australasia, plus exploratory calls from others.

Meanwhile, Graeme Hart's $3.3 billion takeover bid for Carter Holt Harvey could throw up some opportunities in the longer term if the New Zealand billionaire decides to break up the company, as many observers believe he will.

Pillar said PEP would be interested in all parts of Carter Holt, excluding its forests. He said PEP did not like the business because it was so exposed to commodity cycles, which were not its core expertise.

"We will see what happens to the component parts of the business," Pillar said, adding that the firm had expressed an interest in the assets before Hart's surprise deal in August to buy a 51 per cent controlling stake from International Paper.

He declined to comment on talk PEP was interested in The Warehouse's Australian operations.

PEP was in New Zealand presenting opportunities to some of its clients, which include high-profile investors such as the Yale and Harvard university endowment funds and the Stanford Management Company.

Pillar said despite the slowing economy, rising inflation, and the yawning trade gap, New Zealand was an attractive investment destination and Kiwi managers were versatile and innovative.