Formal port offer expected in weeks
Shareholders in Lyttelton Port Company will have to wait another week or so before an announced takeover offer from Christchurch City Council is formalised.
On August 1 Christchurch City Holdings Ltd, the council's infrastructure arm, said it intended make a full takeover of LPC, mopping up the shares it did not already own.
On the same day it said it had entered a lock-up agreement with Port Otago, a 15.48 per cent shareholder in Lyttelton Port, for Otago's shares.
But the formal launch of the takeover can be between 14 and 30 days after the initial takeover notice.
CCHL chief executive Bob Lineham said this week he expected the formal offer to be sent out to shareholders in about a week. It had been hoped the offer would be sent at the same time as an independent adviser's report, being prepared on the merits of the offer.
But Lineham said due to timing issues this was no longer possible. "(It) the report is going to take a little bit longer than us getting the offer out, so the two documents will go out in two stages."
The full takeover offer by CCHL will be made at $3.95 a share. It is also to pay a 20 cent dividend, giving existing shareholders $4.15 a share. Shares in LPC have been trading at or around that $4.15 level.
That dividend payment amounts to about $20 million given that there are are 100 million shares on issue.
LPC chairman Trevor Burt said the $20m would likely be paid out of cashflows, though in theory it could come out of the company's cash reserves that included an insurance payout for quake damage.
LPC received an insurance payout settlement of $438m earlier this year.
Asked if the dividend payment would impact the port's repair plans, Burt said: "Every bit of cash has an impact on our earthquake repair work because we're putting every bit of cash into repair of the port . . . we've got good cash reserves from the insurance settlement but we've always said that every dollar of that is going towards the reinstatement of the assets that we have . . .
"(However) because we've got a lump sum settlement we've got flexibility of what we do and where we spend that cash, and the timing of what we do there."
Burt said the port had appointed Northington Partners to examine the offer and give a range of valuation on the port shares, so shareholders were fully informed.
It would most likely be released in the last week of this month or early next month.
An independent LPC board committee, chaired by Rod Carr, would review the report as would the full board before it and a "target company statement" was sent to shareholders.