By ANNE GIBSON
Trans Tasman shareholders will meet late this month to discuss the takeover of Australian subsidiary Australian Growth Properties.
The meeting has been called to approve the offer but disenchanted Christchurch shareholder John Powell has had two resolutions added to the agenda calling for AGP's cash to be returned to shareholders, including Trans Tasman and its shareholders.
Trans Tasman's bid for full ownership of the Australian company caused casualties this month, as two board members resigned.
Before they left, Australian Growth Properties' chairman, Rod McGeoch, and director David Cooper - a former Trans Tasman managing director - delivered an extensive statement about the deal, which they recommended AGP shareholders accept.
AGP has $440 million cash from selling 345 and 363 George St (including 24 York St) in Sydney to an overseas institutional investor on July 31. Shareholders approved this at an extraordinary general meeting on July 25.
The sales left AGP with only two properties - an office block at 601 Bourke St in Melbourne and James Hardie House at 65 York St in Sydney, together worth about A$60 million ($69 million).
Analysts say Trans Tasman's aim with AGP is to get control of the company at a discount and then to reinvest the $440 million once Sydney's heated office market simmers down. But one speculated that Trans Tasman might be waiting some time.
The analyst estimated Trans Tasman would get control of AGP at a $30 million discount. He calculated this based on the KPMG Corporate Finance independent appraisal of the offer, which put the value of AGP at A$1.01 ($1.15) a share based on 100 per cent ownership. Net tangible asset backing is A$1.02. But Trans Tasman, AGP's majority shareholder, is offering only 85Ac a share.
Trans Tasman's offer was about 16Ac below the true asset backing, the KPMG report said, and a gain for Trans Tasman's shareholders.
Trans Tasman acknowledges the advantages of its AGP takeover in information it sent to its shareholders on October 1.
"The holding of such large cash reserves provides AGP with considerable flexibility in its future business activities. Such flexibility flows through to Trans Tasman, therefore the higher the shareholding Trans Tasman has in AGP, the greater the potential benefit to Trans Tasman shareholders," it said.
The statement from McGeoch and Cooper said Trans Tasman's takeover offer came "at a time when AGP was undertaking a strategic review of its options in respect of how it should spend the surplus cash made available to it through the sale of 345 and 363 George St properties".
They outlined how they proposed alternative options for the cash, including the payment of a special dividend or return of capital. But Trans Tasman rejected the alternatives and has indicated it will also oppose Powell's two resolutions at the meeting.
* Trans Tasman shareholders will meet at 10am next Wednesday on level three of the Centennial Stand at Alexandra Park Function Centre on Greenlane West in Epsom, Auckland.
Trans Tasman meeting to approve takeover
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