Merger Negotiations to Continue Between Ports

Merger Negotiations to Continue Between Key South Island Ports

Statement from the Chairman of Lyttelton Port Company Limited, Rodger Fisher and Chairman of Port of Otago Limited, John Gilks.

The Boards of Lyttelton Port Company Limited [LPC] and Port of Otago Limited [POL] have agreed that continuing to work towards a potential operational merger is warranted.
The next stage for the two companies will be detailed negotiations relating to the content of the report prepared as part of the first stage of the project. That report is of a commercially sensitive nature and will not be released.

In October 2008, the two Boards announced that a Memorandum of Understanding had been signed to start the complex process of exploring a merger of their respective port operations. It was recognised that this project would need time to ensure the interests of all stakeholders were considered.

An independent advisor, Antipodes Capital, was appointed to explore the potential benefits and how the transaction might be structured.

At that time, the two Boards stressed that a key element with any future structure would be that each port company would retain ownership of its land and wharves. This has been recognised as being of significant importance not only to shareholders but also to local interests. To achieve this, the structure being considered involves the legal separation of the infrastructure assets from the operations and commercial activities that occur at each port.
The Board of POL has now considered the Antipodes Report and confirmed its decision to proceed to the next stage.

The Board of LPC noted in its 23 December 2009 Market Update to the NZX that it had received the final report from Antipodes and would be appointing an advisor to work with its management on the review of the report during January 2010.

The Board of LPC has now considered the Antipodes Report and also the independent review prepared by Cameron Partners Investment Bankers [Cameron Partners] who had been commissioned by LPC to review the Antipodes Report.
The two Chairmen today announced that both Boards are satisfied that the potential benefits of an operational merger are such that it is appropriate for POL and LPC to go to the next stage.
“We are now looking to the next stage of more detailed negotiations based upon the content of the Antipodes Report. We appreciate this will take some time as it is a complex concept but it is important that a robust process is followed. Both companies are treating this project with the utmost urgency.

ENDS

© Scoop Media