Council's Lyttelton Port takeover goes unconditional
By Paul McBeth
Sept. 19 (BusinessDesk) - Christchurch City Holdings, the city council's investment and infrastructure unit, has declared its takeover of Lyttelton Port Co unconditional after satisfying the last of its requirements.
Christchurch City Council's investment and infrastructure unit, was offering $3.95 a share, and a 20 cents per share special dividend for a total of $4.15 to mop up the remaining stock after entering into a lock-up agreement with Port Otago. Christchurch City Holdings today completed the deal with Port Otago, and declared the takeover unconditional, it said in a statement to the stock exchange.
That means the council unit can enforce provisions to mop up the remaining shares after crossing the 90 percent ownership threshold. It currently holds 97.68 percent, according to a notice to the NZX.
The shares last traded at $3.90.
A report from Northington Partners, commissioned by Lyttelton Port's independent directors, values the port company at between $3.35 and $3.65, with a mid-point of $3.50 and concludes that the "significant premium" may have been needed to win the support of Port Otago, which is needed to ensure the city's investment company can get to 100 percent ownership.
Northington says the likelihood of an alternative offer are "virtually nil."
Lyttelton is New Zealand's fourth-biggest port and the largest in the South Island, handling 6.56 million tonnes of freight in the year to June. That puts it behind Port of Tauranga, with 1.1 million tonnes, Northport on 8.8 million and Ports of Auckland on about 8 million tonnes, Northington said, citing government figures.
Last month 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.