KEY POINTS:
Goodman Property Trust is ready to join New Zealand's top 10 listed companies as it launches a $275 million share offer.
The move will give small investors their first chance in two years to buy new shares in a listed property fund.
The company said yesterday that it would raise the money in a one-for-eight entitlement offer to fund further acquisitions and develop its industrial and office property portfolio.
The company's shares were placed on a trading halt yesterday to allow it to open up the new entitlement to institutional investors, retail brokers and existing shareholders who will have the opportunity to buy one share for every eight they already own.
That offer period will close tomorrow at 5pm, with the two-day book-building period designed to set a price for the shares - expected to be between $1.43 and $1.49 per unit.
The capital will allow major shareholder Australian parent company Goodman Group to increase its stake in the property trust from 28 per cent to around 35 per cent.
The share offer is expected to push the company in the top 10 listed companies by market capitalisation and liquidity and could push rival property trust Kiwi Income, the owners of Sylvia Park, out of the NZX's top 10 index.
Goodman Property Trust chief executive officer John Dakin said Goodman Group would take up $77 million of the capital raising allowance as pro rata and would have the option of buying a further $80 million.
A prospectus will then be made available to the general public. At least $48 million will be held open for the public offer which opens on November 20 and closes on December 14.
Dakin said the last time new shares had been opened to retail investors was in 2005 when the company held a $250 million capital raising. The last couple of capital raisings have only been open to institutional investors.
Dakin said the company had seen increased demand from ordinary investors and also hoped to cash in on the recent flight to quality following the collapse of seven finance companies so far this year.
New investors will also be able to take advantage of the portfolio investment entity regime brought in on October 1 which allows individual investors to be taxed at their personal rate rather than the company tax rate of 33 per cent.
A big chunk of the capital raising has been earmarked to buy a 50 per cent stake in the Highbrook Development company, which owns the majority of the major office park development on Auckland's Waiouru Peninsula.
Around $98 million of the funds raised has been set aside for properties already owned by the trust and include two new office developments and further industrial development at its Penrose industrial park The Gate.
The rest of the money raised will be used to reduced the trust's borrowings from 37.7 per cent to 31.4 per cent. That will allow the company to look around for further development work.
The Goodman Property Trust announced a strong interim result for the six months ended September 30 with its after-tax profit up from $20.1 million to $28.7 million.
* TOP LISTED COMPANIES
Based on market capitalisation and liquidity.
Source: NZX
1: Telecom
2: Fletcher Building
3: Auckland Airport
4: Contact Energy
5: SkyCity
6: F&P Healthcare
7: Infratil
8: Sky TV
9: Ryman Healthcare
10: Kiwi Income Property Trust
12: Goodman Property Trust
