January 2008 decisionsAntipodean acquires Henderson, Auckland land as part of Spotlight purchase Contact buys Tauhara, Taupo, Landcorp land for geothermal development Crescent Capital Partners gets approval for failed bid to buy Abano Healthcare Sogrape of Portugal buys Framingham Wine business from Pernod Ricard Nobilo buys Waihopai Valley, Marlborough leasehold land for vineyard Holcim acquires five properties for proposed Weston, Otago cement plant
Antipodean acquires Henderson, Auckland land as part of Spotlight purchaseAntipodean Properties Limited, owned 75% by The William Pears Group of Companies Limited and 25% by Jonathan Berman, both of the U.K., has approval to acquire 0.4 hectares at 111 Lincoln Road, Henderson, Auckland for $6,000,103 from SPG Properties Limited, owned 100% in Australia. The land “either alone or together with any associated land, exceeds 0.4 hectares and adjoins land that is listed, or in a class listed, as a reserve, a public park, or other sensitive area by the [OIO]”.
The OIO states:
The Applicant proposes to purchase the property as part of its acquisition of a portfolio of five properties owned by SPG Properties Limited (SPG). SPG is part of the Spotlight group of companies, which operates a chain of fabric, craft and home decoration stores in Australia and New Zealand, and is ultimately owned by the Fraid brothers of Australia.
The acquisition complements the Applicant’s existing New Zealand property holdings. This comprises the Three Kings Plaza, the Three Kings Shopping Centre, a portfolio of ten supermarket properties and an undivided half share in another portfolio of 18 supermarket properties. The relevant land comprises part of the Lincoln Centre, a well established bulk retail centre. The investment is consistent with the Applicant’s intention to invest in New Zealand commercial property with growth potential.
If the proposed investment was refused, New Zealand’s image as a place to invest would likely be adversely affected.
The Applicant has undertaken previous investments in New Zealand that have received Overseas Investment Commission and Overseas Investment Office consent. The investment will enhance the ongoing viability of the other overseas investments undertaken by the Applicant, as economies of scale will be achieved through the management and development of the Applicant’s retail properties.
Antipodean last received an approval from the OIO in March 2007. See our commentary for that month for further details.
[Decision number 200810007.] Contact buys Tauhara, Taupo, Landcorp land for geothermal developmentContact Energy Limited has approval to acquire 153 hectares at Aratiatia Station, Tauhara District, Taupo, Waikato for $4,017,704 from Landcorp Farming Limited of Aotearoa. Landcorp is owned by the Crown.
Contact Energy is owned · 59.0354% in Australia, · 2.3369% in the U.S.A., · 1.4894% in the U.K., · 15.29% by “various overseas persons”, · 1.2583% by “unknown overseas persons”, · and 20.59% in Aotearoa.
According to the OIO,
The Applicant already holds a registered encumbrance and easement over the land and proposes to acquire the land from Landcorp Farming Limited (Landcorp). The encumbrance and easement enables the Applicant to undertake its geothermal operations in the Tauhara area.
The Applicant proposes to use the land to support and further develop its geothermal energy operations in the Tauhara area. The Applicant proposes to enter into a lease or licence with local farming interests to enable local farmers to use the land surface for grazing or other activities that are compatible with geothermal energy operations.
The Applicant has announced plans to invest up to $2 billion in renewable energy projects over the next five years. This investment includes the proposed construction of up to three new geothermal power stations in the Tauhara area. The relevant land will be used to support the geothermal energy operations of these power stations.
If the investment proceeds, the land will comprise part of the Applicant’s portfolio of geothermal power generation assets. The Applicant’s geothermal energy-related interests cover approximately 8,000 hectares of land overlying the geothermal fields in the Wairakei/Taupo/Tauhara region. The Applicant holds the right to extract geothermal energy from the subsurface of the Tauhara geothermal field. The Applicant is also entitled to carry out activities on different areas of the land surface, for operational purposes associated with managing the geothermal resource.
The Crown’s original intentions regarding the use of the geothermal energy source in the land could not be given effect if Landcorp Farming sold the land to a third party who developed it for residential, industrial or commercial purposes. Use of land for these purposes is incompatible with its use for geothermal energy purposes.
[Decision number 200810009.] Crescent Capital Partners gets approval for failed bid to buy Abano HealthcareCrescent Capital Partners Limited, owned 76.7% in Australia, 18.8% in the U.S.A., and 4.5% by “various overseas persons”, has approval to acquire the remaining shares it does not already own in Abano Healthcare Group Limited for $106,705,716 from the other shareholders, all of whom are in Aotearoa.
The OIO states:
Crescent Capital Partners Limited (Crescent) proposes to acquire 100% of the ordinary shares of Abano Healthcare Group Limited (Abano), pursuant to an offer made in accordance with the Takeovers Code.
Abano, which is listed on the New Zealand Stock Exchange, is a specialist medical and healthcare organisation which was established in 1999. Abano operates in the Audiology, Dental, Diagnostics and Rehabilitation sectors. Abano’s operations extend across a range of residential, medical and community facilities throughout New Zealand and in Australia, offering high quality healthcare and medical services.
The proposed investment is consistent with Crescent’s investment philosophy of assisting companies increase their value through the provision of capital and by providing advice at a strategic and board level. Crescent invests in companies which demonstrate certain factors including profitability, and strong and sustainable market positions.
In fact the takeover attempt failed, lingering on until July 2008 in a scrap over who should pay the costs of the takeover. It was settled out of court after Abano had withheld dividends to Crescent and court action had been initiated (“Settlement of Takeover Costs Dispute”, by Abano media release, 1/7/08, http://www.abanohealthcare.co.nz/news/1c106882-fe1c-4064-8c74-37b9377a9945.html?PathId=3ee9a4f4-4c86-412f-aaf0-28a5842cb21a, accessed 6 July 2008).
Crescent had 10.89% of Abano at the time it made the application to the OIO but bought further shares in Abano on the sharemarket after it had made its takeover offer in December 2007, to increase its shareholding to 19.9% (Abano media release, “Abano directors not surprised by latest Crescent move”, 12/1/2008, http://www.abanohealthcare.co.nz/news/bcf90050-f8ea-487d-89c9-c9279584175e.html, accessed 6 July 2008). Presumably the valuation given by the OIO was for the balance of shares other than the 10.89% Crescent held at the time of its application.
[Decision number 200810005.] Sogrape of Portugal buys Framingham Wine business from Pernod RicardFramingham Wines Limited (“formerly known as IW New Zealand Wine Company Limited”), owned 100% in Portugal by Sogrape Investimentos SGPS, SA, has approval to acquire 20 hectares at Condors Bend Road, Renwick, Blenheim, Marlborough for a suppressed amount from Pernod Ricard New Zealand Limited and Framingham Wine Company Limited, owned 100% in France by Pernod Ricard SA. However the purchase is part of the takeover of the Framingham Wines business as a whole.
Although the OIO has suppressed the amount paid, we can calculate from the statistics supplied: $13,104,500.
The OIO states:
The Applicant is a special purpose vehicle established for the purposes of the proposed investment by Sogrape Investimentos SGPS, SA (Sogrape), a privately owned Portuguese wine company. Sogrape has entered into a conditional agreement with Pernod Ricard New Zealand Limited and Framingham Wine Company Limited to purchase the business and assets that comprise the Framingham wine business, including the relevant land.
The proposed investment will result in Sogrape acquiring a fully integrated wine producer situated in the Wairau Valley, Marlborough together with 15 hectares of vineyards to provide a grape supply. Framingham is an established Marlborough based winery producing wines under the Framingham, Red Hill and Tylers Stream labels. Framingham sources grapes from owned and leased vineyards in the Wairau Valley as well as from a number of contract growers.
Sogrape owns an extensive range of wine brands all over the world, including Europe and the Americas, which it offers its customers. Sogrape does not own any Australasian brands. The proposed acquisition will enable Sogrape to integrate a New Zealand brand into its wine portfolio for global distribution through the Sogrape network.
[Decision number 200810008.] Nobilo buys Waihopai Valley, Marlborough leasehold land for vineyardNobilo Wine Group Limited, owned by Constellation International Holdings Limited of the U.S.A., has approval to acquire 22 hectares of leasehold at Waihopai Valley Road, Blenheim, Marlborough for $993,761 from Brian Stanley Blick and Sheryl Margaret Blick of Aotearoa.
The OIO states:
Nobilo Wine Group Limited (Nobilo) carries out a fully integrated viticulture business, which includes the growing and development of grapes, and the manufacture, importation, distribution and sale of red and white wine within New Zealand and, increasingly, for export markets. Nobilo advises that export growth has been constrained by grape supply. Nobilo proposes to secure additional grape supply and increased processing capacity.
Nobilo currently has a variety of interests in New Zealand, including land utilised for the growing of grapes, and as wineries and production sites. In total it either owns or leases approximately 790 hectares of vineyards, in New Zealand predominantly in the Hawkes Bay, Marlborough and Auckland regions. Nobilo also sources grapes from contract growers from around 1,400 hectares in area.
Nobilo proposes to acquire the land, which is adjacent to other properties currently owned by Nobilo, to develop the land as a vineyard. The land contains approximately 19.73 plantable hectares which will be planted in Pinot Noir. The proposed development will provide Nobilo with an increased grape supply which will allow it to continue to develop its export wine markets and enhance the reputation of New Zealand wine overseas. This is likely to result in significant increases in employment, processing of grapes and export levels.
[Decision number 200810010.] Holcim acquires five properties for proposed Weston, Otago cement plantHolcim (New Zealand) Limited, owned 23.6% in Switzerland by Thomas Schmidheiny, 66.4% in Switzerland by minority shareholders, and 10% in the U.S.A. by Capital Group Companies, has approval to acquire five blocks of land totalling 150 hectares for $3,437,350. In each case, the amount was originally suppressed, and released only on appeal.
The land is being acquired as part of Holcim’s proposal to move its cement manufacturing from Westport, although it has not yet made a final decision on whether it will move. It is being strongly fought by local residents in the Waiareka Valley, who have concerns about air, health, noise, traffic, economics, landscape and heritage issues. It also acquired land in the area in December 2007 (see our commentary for that month for further details).
The acquisitions are as follows:
· 20 hectares at 265 Airedale Road, Weston, North Otago for $251,100 (including GST) from Neil John Harvey and Elizabeth Anne Harvey of Aotearoa. The OIO states: The land is a key element of the Weston limestone/siltstone and tuff quarries, which are an integral component of Holcim’s proposed new cement plant. Holcim intends that a stormwater settling pond will be constructed on the land where a natural watercourse is situated and the only area of suitable size for a dam to be constructed in the vicinity of these quarries. The purpose of the stormwater settling pond is to ensure that any sediments in the water run-off from the quarry are collected and settled during time of rain, instead of flowing onto neighbouring land. [Decision number 200810001.]
· 5 hectares at 154 Victoria Hill Road, Windsor, North Otago for $56,250 (including GST) from Windsor Blue Limited of Aotearoa. The OIO states: The acquisition of the relevant land will form a key component of the Windsor silica sand pit which is to be situated on the adjoining land owned by Holcim. The relevant land will provide access to enable the opening up and operation of the sand pit and will also be used for the truck road access into and out of the sand pit. [Decision number 200810002.]
· 9 hectares at 2100 Weston Ngapara Road, Ngapara, North Otago for $370,000 from Richard John Hardwick and Aliesa Marie Hardwick of Aotearoa. The OIO states: The acquisition of the relevant land will assist Holcim in establishing an acceptable buffer zone between the Ngapara coal mine and neighbouring properties. The establishment of the buffer zone is part of a commitment by Holcim to ensure that the social and environmental impact of the coal mine is minimised to the greatest extent possible. [Decision number 200810003.]
· 4.7 hectares at 919 Ngapara Georgetown Road, Ngapara, North Otago for $285,000 from Christopher Peter Cooper and Delwynn Marie Brown of Aotearoa. The OIO states: The acquisition of the relevant land will assist Holcim in establishing an acceptable buffer zone between the Ngapara coal mine and neighbouring properties. The establishment of the buffer zone is part of a commitment by Holcim to ensure that the social and environmental impact of the coal mine is minimised to the greatest extent possible. [Decision number 200810004.]
· 111 hectares at Bobbing Creek Road, Ngapara, North Otago for $2,475,000 (including GST) from Meadowbrook Farm Limited of Aotearoa. The OIO states: The acquisition of the relevant land will assist Holcim is establishing an acceptable buffer zone between the Ngapara coal mine and neighbouring properties. Holcim advises that part of the land will be used for coal mining, stock piling, earthworks, drainage and associated activities. The establishment of the buffer zone is part of a commitment by Holcim to ensure that the social and environmental impact of the coal mine is minimised to the greatest extent possible. [Decision number 200810006.]
In all cases, according to the OIO:
Holcim (New Zealand) Limited (Holcim), through its operating divisions and subsidiaries, is involved in the manufacture and distribution of cement, the extraction and processing of aggregate, the manufacture of ready mixed concrete, the extraction and processing of limestone and the sale of all the above products. Holcim operates quarries from which it extracts and processes aggregates for supply. It manufactures cement at Cape Foulwind, near Westport, and transports it primarily by ship to a number of distribution outlets strategically situated around the country. Holcim currently produces approximately 500,000 tonnes of cement annually from its Westport works. Holcim, through its ready mixed concrete division, Holcim Concrete, operates a network of ready mixed concrete plants in Auckland and Hamilton.
Holcim’s Westport cement works is presently operating at capacity and cannot meet current domestic demand, and it also has a limited economic life. Holcim has actively investigated its future alternatives, including a range of upgrade alternatives for the Westport plant, importing cement either to supplement the Westport operation or to replace domestic manufactured cement with imported cement and a new cement plant at Weston, Waitaki district, North Otago.
Holcim proposes to establish and operate a cement manufacturing complex on land owned by Holcim adjacent to the Weston-Ngapara Road, Waitaki district. This site is situated some 3km northwest of the township of Weston and some 7km west of Oamaru. The land at Weston on which the plant and limestone, siltstone and tuff quarries is to be sited is zoned Rural General (Rural G) in the Waitaki District Plan, and has had a special identification as a Cement Policy Area since the early 1980s. This identification specifically provides for the manufacture of cement and associated quarrying of raw materials. The coal and sand pit areas at Ngapara and Windsor are zoned Rural G. Summary statisticsAll investments The value of investment approved in January 2008 is considerably lower than for the previous January, both in net value (i.e. disregarding sales from one overseas investor to another, and discounting part New Zealand ownership of the assets) and gross value. It is even smaller if it is remembered that one approval, and the largest, at $106,705,716 (both net and gross), did not in the end proceed: Crescent Capital Partners’ takeover attempt for Abano Healthcare. January 2007 was boosted by the sale of Independent Liquor (see note to the table below) which went for $1.25 billion. By far the greatest part of the value of the approvals is for sale from one overseas investor to another.
* This is our calculation using figures supplied by the OIO for February 2007. The statistics the OIO provided for January 2007 show these as “confidential” due to the suppression of the value of the sale of Independent Liquor, purchased by private equity funds Pacific Equity Partners Pty Limited and CCMP Capital Asia Pte Limited. We were able to calculate that this price was $1,250,000,000.
Investment involving land Gross and net sales of land approved by the OIO during the 2007 and 2008 January months were very similar. There was just one refusal (above) last year, and none so far in 2008.
Fishing Quota As usual, there was no fishing quota approved for sale this month.
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Compiled by: Campaign Against Foreign Control of Aotearoa, P. O. Box 2258 Christchurch. |
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