Summerset sell-off theories outlined

17:00, May 07 2013

Quadrant Private Equity's impending sale of its stake in Summerset may be behind the bid to dual list the firm on the Australian share market, according to market sources.

The retirement village operator yesterday said it had applied for a secondary listing on the ASX due to huge demand from Australian investors who are restricted from investing directly in New Zealand.

The explanation met with some scepticism from the investment community, giving rise to questions about the real motive behind the move.

"It potentially broadens the market of potential investors but many fund managers already have mandates to invest in New Zealand . . . it changes nothing, it just adds cost," said one analyst.

The announcement comes a week after representatives from the Australian buyout group told shareholders in Wellington that it plans to divest its cornerstone stake, but committed to signalling its intentions well in advance.

The private equity firm earlier this year sold an 18 per cent stake in Summerset after the post-float escrow period ended, which was readily snapped up by retail and institutional investors.


Summerset said it has no plans to issue new shares. That means if the ASX listing is to launch with a critical liquidity, a significant portion of the firm's existing stock will need to be registered in Australia.

QPE owns about 37.2 per cent of Summersetwith the remainder held in small parcels all under 6 per cent, according to the firm's latest annual report.

Summerset maintains the move is not related to the QPE divestment.

"This is a board decision relating to increased interest from Australia, mandate barriers in this market and desire to have long term increased liquidity for all shareholders," said chief executive Norah Barlow.

The other theory floated by the investment community was that the firm was looking to steal a march on rival and sector darling Ryman Healthcare, which has previously signalled it may look at an ASX listing to help fund its expansion across the Tasman.

The Christchurch-based firm has recently begun construction on its first non-New Zealand village in the Melbourne suburb of Wheelers Hill, and recently appointed its first Australian director.

Summerset shares closed 0.3 per cent higher yesterday at $3.20, and have gained 129 per cent since listing in November 2011.

The Dominion Post