Lyttelton Port shares spike
The Christchurch City Council intends to takeover the Lyttelton Port shares it does not already own.
Christchurch City Holdings Ltd, the infrastructure arm of the council, today announced it has entered into a lock-up agreement with Port Otago, a 15.48 per cent shareholder in Lyttelton Port.
CCHL has long held an intention to take the port to full city ownership, and will launch a full takeover offer next week.
Shares in Lyttelton Port today spiked on the offer.
The port shares jumped 29 cents or 8.8 per cent once a trading halt on the NZX was lifted.
The announcement coincides with renewed discussion about the potential sale of council assets.
A report into the council's finances by corporate finance advisory firm Cameron Partners questions whether the council needs to continue to own all its commercial assets, saying that many millions of dollars could be raised by partially selling of commercial assets such as Christchurch Airport and Orion.
Lyttelton Port has been in a process of reinstating some of its assets following damage to wharves and other assets during the 2010 and 2011 earthquakes.
CCHL said Port Otago had agreed to accept the takeover offer for Lyttelton port ordinary shares.
CCHL owns 79.57 per cent of the ordinary shares in Lyttelton and intends to make an offer for 100 per cent of the port. It will make a cash offer of $3.95 of per ordinary Lyttelton port share.
In addition, CCHL will be seeking payment by Lyttelton port of a special dividend of 20 cents per share to existing shareholders; to be fully imputed to the extent tax imputation credits are available.
It is expected that a formal takeover notice will be issued early next week.
Once the takeover offer process is complete, CCHL intends to move to the compulsory acquisition of shares under provisions in the Takeovers Code to achieve 100 per cent ownership of the port and to delist the company.
Under the code once a takeover reaches a 90 per cent threshold of shares on issue, those behind the takeover can compulsorily acquire the remaining shares.
"This acquisition will enable CCHL to have greater flexibility in its relationship with Lyttelton port," CCHL chief executive Bob Lineham said.