Lyttelton Port board backs council takeover proposal
Lyttelton Port board backs council takeover, will pay special dividend
By Paul McBeth
Sept. 1 (BusinessDesk) - The board of Lyttelton Port Co has backed a takeover bid by council subsidiary Christchurch City Holdings, and will resolve to pay a special dividend to existing shareholders.
Christchurch City Council's investment and infrastructure unit, which already owns about 79.6 percent of the port, has entered into a lock-up agreement with Port Otago for its 15.5 percent holding, and will offer $3.95 a share to mop up the remaining stock. Having crossed the 90 percent threshold with the lock-up agreement, it can enforce Takeover Code provisions to compulsorily acquire the remaining shares.
The port's directors also resolved to pay a fully-imputed special dividend of 20 cents per share, provided certain conditions were met. The dividend is payable on Sept. 18 with a Sept. 16 record date.
"The board urges shareholders to do nothing in respect of the offer until they receive the target company statement (including the board's full recommendation) and the independent adviser's report," it said.
The announcement came after the close of trading, and the shares were unchanged at $4.11.
Last week Lyttelton Port reported a net profit of $343.2 million in the year ended June 30, swelled by a $328.2 million insurance payment. Underlying earnings, excluding the earthquake payments, were flat at $15.1 million, the lower end of its forecast range of $15 million to $16 million, as expenses rose faster than sales.