Kiwi fires off insults as war with Capital heats up

A struggle between two listed landlords who own real estate worth $1.6 billion hotted up yesterday. Insults flew over a $50 million management sale and a call went out for shareholder involvement.

After being rejected by two regulators, predatory landlord Kiwi Income Property Trust tried to turn the management sale carrot into a stick.

Kiwi was knocked back by the regulatory arm of NZX, which refused to grant a ruling stopping the Capital Properties management sale. This came after the Takeovers Panel rejected Kiwi's complaint over the deal.

NZX found the Capital sale would not change the nature of the business and would not require shareholder approval under the listing rules.

This prompted an attack from Kiwi, which accused Capital's board of being high-handed and taking an unpredictable swerve.

Capital's carrot for its 17,000 mainly retail shareholders is a promise that it will pay out the full amount as a one-off distribution. But Kiwi, in trying to turn that into a stick, is now demanding a formal change to Capital's constitution, which would mean a special shareholder meeting.

Kiwi chief executive Angus McNaughton said he was confident that under the Companies Act, Capital would now be forced to hold the meeting. An NZX spokesman backed him, saying that under the listing rules a substantial shareholder request of this nature would automatically trigger a meeting.

But Capital, whose shares are trading at $1.18, said it would talk to its lawyers before deciding about any meeting. It also threatened to approach Kiwi's trustee to establish whether the best interests of its unitholders were being upheld.