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ING says Calan revaluation is inconsistent

ING says Calan revaluation approach is inconsistent

ING Property Trust (“ING”) said today that Calan Healthcare Properties’ presentation of its latest revaluation is inconsistent with Calan’s historical practice and has the potential to mislead the market.

“Calan is trying to blur the lines between gross and net asset values to claim that its asset backing has risen substantially more than it has,” ING Property Trust Management’s Managing Director Andrew Evans said.

“NTA is a critical valuation method widely used as a benchmark by the market and by companies to provide their owners with a fair way of assessing true worth.

“Calan has always used this accepted valuation methodology. We note that Calan’s 2005 annual report (www.calan.co.nz/annual_reports/calanAR2005.pdf) highlights NTA of $1.19 at 30 June 2005,” Mr Evans said.

Calan’s independent valuers have now reported an increase in Calan’s property valuation as at 31 January 2006, equating to six cents a unit, bringing its NTA to $1.25 per unit.

“It is therefore confusing for Calan’s investors, and those looking at buying units, to focus on the ‘gross asset value’ of $1.29 a unit, a metric Calan has never historically used.

“We are very heartened our takeover offer that values Calan at $1.25 a unit is in line with the revised NTA valuation. Indeed the revaluation reinforces our view that our offer is full and fair.”

Mr Evans noted that Calan units had traditionally traded at a discount to NTA and prior to ING’s takeover announcement Calan units were trading at $1.15. Mr Evans also said that Calan’s revised NTA figure included approximately 0.6 cents per unit of currency gains.

“As a result of the revaluation Calan’s managers will, other things being equal, receive units to the value of approximately $1.0 million under the manager’s incentive scheme. This further dilutes unitholders’ NTA,” Mr Evans said.
He also noted that Calan’s managers have usually sold their bonus units, most recently selling at prices significantly below the ING offer price. Meanwhile, ING expects to dispatch its $1.25 per unit offer (comprising 63 cents cash plus 0.528 ING Property Trust units) next week.

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