Port board supports council takeover
The board of Lyttelton Port of Christchurch (LPC) unanimously recommends shareholders accept a $3.95 a share takeover offer from Christchurch City Holdings (CCHL), the investment arm of the Christchurch City Council.
Christchurch City Holdings announced the LPC takeover two weeks ago, on the same day the Christchurch City council released the Cameron Partners report into its finances and ways for it to raise capital.
The investment bankers said the city could have a financial hole of up to about $900 million and could sell some assets to help reduce that.
While CCHL now holds 79.6 per cent of LPC it does not have complete control and is legally not entitled to any more information than other shareholders.
It can only get dividends from LPC but with complete control it will have control of the port's assets and cashflows.
The LPC board met yesterday to consider the independent adviser's report prepared by Northington Partners on the merits of the offer and to finalise the Target Company Statement and directors' recommendation.
The board has unanimously resolved to recommend to shareholders they accept the offer and resolved to pay a fully imputed special dividend 20 cents a share on September 18, to shareholders on the share register on September 16.
The board expects to send the company statement and adviser's report to shareholders tomorrow.
CCHL has secured the agreement of Port of Otago to sell its 15.5 per cent stake in LPC at $3.95 a share so has more than 90 per cent acceptance to force the remaining shareholders to sell.
Port of Otago bought its stake in LPC at $2.35 a share in early 2006 to block LPC's deal to sell part of the port's operations to huge Chinese port operator Hutchison Port Holdings. Fairfax NZ