KEY POINTS:
Southern Capital chairman Graeme Wong said many shareholders would be better off accepting a takeover bid made for the company rather than a share buy-back plan.
Southern Capital paid an interim dividend of 2.5c last month and has launched a share buy-back of up to 14.75 per cent of the issued capital at $1.115 each.
Whether people opted for the buy-back or the takeover would depend upon their circumstances, Wong said.
"But for a lot of the shareholders they're going to be better off under the bid," he said.
Southern Capital directors Stuart McKinlay and Trevor Scott have made the takeover offer for all the shares at $1.197 each.
The takeover was officially filed this week and a target company statement was being drawn up, with neither McKinlay nor Scott involved in the process, Wong said.
Southern Capital yesterday posted a net profit for the six months ending December 31 of $57.4 million following the sale last year of its equipment hire business Hirequip.
The sale to PES Finance was completed for $168.2 million in December and the listed entity changed its name from Hirequip New Zealand to Southern Capital. The company would be wound up and funds gradually returned to shareholders, which could take until next January.
Remaining legacy assets included interests in biotech firms BLIS Technologies and Botry-Zen, a stake in Clifford Bay Marine Farms, the tail end of the Omaha Beach development and properties which were either leased back to Hirequip or were bought for development into new branches.
McKinlay, who founded Hirequip in 1968 and was staying on as a consultant during the change in ownership, said the properties made up most of the remaining value.
"So they will provide an ongoing rental stream which in itself makes it a reasonable investment," he said.
It would be a surprise if the takeover was not a success, he said. "If we do that it allows us to get some reward, not without risk, and it allows the publicly listed company to be wound up quickly."
