Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – April 2015 Decisions

Americans Add To Their 27,000 Hectare Farm

Lees Valley Station LLC, United States of America (100%), received approval for the acquisition of a freehold interest in approximately 369 hectares of land at 452 Raineys Road, View Hill, Oxford (Gleneyre Farm). The vendor was Gleneyre Limited (Diane and Hugh Taylor, Craig Forsyth), New Zealand (100%); consideration was “withheld under section 9(2)(b)(ii) of the Official Information Act”. The OIO states: “The Applicant intends to develop Gleneyre Farm primarily for dairy support to be managed in conjunction with Lees Valley Station, in order to enhance the operational efficiencies and productivity of both farms”. Lees Valley bought the nearby 27,000 hectare Mt Pember Station in August 2013

Japanese Increase Their Shareholding In ANZCO

Itoham Foods Inc, Japan (100%), received approval for the acquisition of rights or interests in up to 65% of the shares of ANZCO Foods Limited which owns or controls:

a freehold interest in approximately 73.8 hectares of land at Eltham, Taranaki; and
a freehold interest in approximately 6.9 hectares of land at Waitara, Taranaki; and
a freehold interest in approximately 203.9 hectares of land at Bulls, Rangitikei District; and
a freehold interest in approximately 227.6 hectares of land at Christy’s Road, Canterbury; and
a freehold interest in approximately 602.8 hectares of land at Seaside Road, Canterbury; and
a freehold interest in approximately 361.4 hectares of land at Seafield Road, Canterbury; and
a freehold interest in approximately 24.6 hectares of land at Blenheim, Marlborough; and
a freehold interest in approximately 5.3 hectares of land at Ashburton, Canterbury; and
a freehold interest in approximately 0.5 hectares of land at Dunedin, Otago; and
a freehold interest in approximately 141.5 hectares of land at Kokiri, Westland.

Approval was also received for an overseas investment in significant business assets, being the Applicant’s acquisition of up to 65% of the shares in ANZCO Foods Limited, which has assets in excess of $100 million. The vendor was Nippon Suisan Kaisha Limited, Sir Graeme Harrison, and JANZ Investments Limited, Nippon Suisan Kaisha Limited (“Nissui”), Japan (50.3%) and New Zealand Public (49.7%); consideration was $40,022,558. The OIO states: “Itoham Foods Inc (“Itoham”), a Japanese company that specialises in meat products, bought shares in ANZCO Foods Limited in 1995. It now seeks to increase its shareholding by approximately 17%. Itoham has been a supportive major shareholder in ANZCO Foods Limited over the previous 20 years and the overseas investment will enable Itoham to continue to do so”. See our monthly commentaries in 1995 for various acquisitions that year by Itoham and ANZCO.

Minority Shareholders To Finally Exit Radius Properties

Montagu Investment Holdings Limited, Harald McPike, Bahamas (92.9% voting; 63.7% economic), Craig Nathen Priscott, New Zealand (7.1% voting; 17.2 % economic), David Leonard Glenn, New Zealand (17.2% economic) and Maier Family Trustees Limited (a related entity of Sherry Withers Maier and Samford Lee Maier), New Zealand (1.9% economic) received approval for the acquisition of rights or interests in up to 100% of the shares of Radius Properties Limited (“RPL”) and QuantRes Finance Limited’s (an associate of the Applicant) acquisition of rights or interests in those shares pursuant to the security arrangements in connection with its lending to the Applicant giving them each a 25% or more ownership or control interest in RPL which owns or controls a freehold interest in 0.6 hectares of land at 135 Maeroa Road Hamilton.

The vendors were existing shareholders in Radius Properties Limited, Montagu Investment Holdings Limited (refer above), Bahamas and New Zealand (50%) and predominantly New Zealand retail investors (50%): Asset value is: “Yet to be determined”. The OIO states: “Radius Properties Limited (RPL) owns a portfolio of properties in the aged care sector including one at 135 Maeroa Road Hamilton. The Applicant views RPL as an attractive long term investment and is committed to enhancing the quality and size of RPL’s portfolio”.

This seems to the final chapter in a long running saga for minority shareholders, as reported by Rob Stock at Stuff.co.nz (27/1/13): “Goings-on at Radius Properties offer an object lesson for investors about the pitfalls of buying into an investment they can’t trade. Investors trapped in the illiquid rest-home property investment oversubscribed to an offer for their shares last year in a bid to get some of their money out even though the price offered was at a big discount to the value of the assets backing their shares.

“They were offered the chance to sell 19.99% of their shares at 42 cents per share to Montagu Investment Holdings, controlled by directors of Ascot Capital Management, which had wrested control of the company in 2010 from a previous manager. It was an offer that raised eyebrows as a valuation report shows the unaudited net tangible assets backing each Radius share to be worth 77 cents at the end of September. They are now being offered a chance to sell more Radius Properties shares, again at a discount, By January 18 (2013), the holders of another 15.84% of shares had accepted.

“That second offer, which appears to have traction, will raise eyebrows for an additional reason: Radius has received an offer to buy five properties and the interest held by Radius in two property syndicates for $23.76 million, a sum that represents 59 cents a share. The trouble is, the sale could go ahead only if there is a special resolution, and Montagu will not vote for the sale of the properties for what it believes is a 16% discount to their true value. That would make it very unlikely the sale would be approved until it goes unconditional on the shares it has been offered. Once it controls more than 25% of the shares in Radius, Montagu could block any special resolution put to the vote.

“The original offer was designed to provide some liquidity to investors who want to sell their shares, as the company is not listed on any stock exchange, and was too small to be listed economically, said the directors, who had no plans to sell down any of Radius’s holdings to free up cash to return to shareholders. Montagu is ultimately owned by Radius directors Sandy Maier, who was the statutory manager of South Canterbury Finance, and David Glenn, as well as business associate Craig Priscott.

“The company trying to buy the assets is Radius Residential Care Limited, the tenant of Radius Properties. One of its directors is Charles Anthony Hannon, a former director of Radius Properties before an investor vote brought in Glenn and Maier on a mandate to turn around the struggling company and restore the payment of dividends to shareholders. Many investors bought into Radius as clients of financial planner Vestar, which vanished after the collapse of investment firms it backed, but there was no ready market for those shares”.

Dutch Get Retrospective Consent For Southland Property

In two separate decisions the Dutch expand their tulip growing business. Firstly, Triflor NZ Limited, Gerardus Franciscus Hageman, Netherlands (26.7%), Judith Maria van Dam, Netherlands (26.7%), Hendrikus Maria van Dam, Netherlands (26.6%) and Semke David Jan Gerben Riepstra, Netherlands (20%) received approval for the acquisition of a freehold interest in seven hectares of land at Tramway Road East, Edendale, Southland. The vendor was the Wairau Agribusiness Investment Limited, New Zealand (100%): consideration was $420,000. The OIO states: “The Applicant is a grower of tulip bulbs for export. The Applicant has obtained retrospective consent to acquire the land, which has accommodation for the Applicant’s employees, and is also used for growing peonies for export”.

In the second decision, Peony NZ Limited, Niels Molenaar, Netherlands (22.5%), Dennis Molenaar, Netherlands (22.5%), Gerardus Franciscus Hageman, Netherlands (12%), Hendrikus Maria van Dam, Netherlands (12%), Judith Maria van Dam, Netherlands (12%), Rudi Verplancke, Netherlands (10%) and Semke David Jan Gerben Riepstra, Netherlands (9%) received approval for the acquisition of a leasehold interest in approximately four hectares of land at Tramway Road East, Edendale, Southland.

The vendor was Triflor NZ Limited Gerardus Franciscus Hageman, Netherlands (26.7%), Judith Maria van Dam, Netherlands (26.7%) Hendrikus Maria van Dam, Netherlands (26.6%) and Semke David Jan Gerben Riepstra, Netherlands (20%); consideration was $100,145. The OIO states: “The Applicant has obtained retrospective consent to an informal lease of land used for growing peonies for export”. Triflor have previously purchased 124 hectares nearby for a similar purpose. See our December 2013 and February 2015 commentaries for details.

Aussies Pick Movenpick

Emerald Foods Group (HK) Limited, Australia (80%), United States Public (15.7%) and various overseas persons (4.3%) received approval for the acquisition of a freehold interest in approximately 0.8 hectares of land at 1 Accent Drive, East Tamaki, Auckland; and an overseas investment in sensitive land, being the Applicant’s acquisition of rights or interests in 100% of the securities of Emerald Foods Limited (being a 100% subsidiary of Emerald Group Limited), which owns or controls a leasehold interest in approximately 0.8 hectares of land at 1 Accent Drive, East Tamaki, Auckland.

The vendor was Emerald Group Limited (Diane Shirley Foreman), New Zealand (100%): consideration was “withheld under section 9(2)(b)(ii) of the Official Information Act”. The OIO states: “The Vendor, including subsidiaries of the Vendor, manufactures, distributes and exports ice cream and sorbet products from the land and operates a global ice cream parlour/outlet franchise network and associated activities. The Applicant intends to develop the business located on the land, with particular regard to increasing exports to China”.

John Anthony at Stuff.co.nz (10/6/15) reported briefly on the sale. “The New Zealand company which makes Movenpick and New Zealand Natural icecream has been sold to an overseas buyer who plans to increase exports to China. Emerald Foods was sold to Emerald Foods Group (HK) in April, the Overseas Investment Office records show. As well as Movenpick and New Zealand Natural, Emerald Foods makes Zilch, Lite Licks and Chateau icecream. Emerald Foods was sold by the Emerald Group which is owned by 2010 New Zealand Entrepreneur of the Year Diane Foreman.

Emerald Foods Group (HK) is 80% Australian-owned, 16% United States-owned and 4% owned by various overseas people. The sale includes the company’s factory in East Tamaki, Auckland which employs more than 100 staff. Emerald Foods was established in 1985 and has ice cream parlours and a franchise network of more than 650 stores in more than 24 countries. It also has offices in Sydney, Brisbane and Shanghai”.

Other April Decisions

Partridge (Ute) and Partridge (Fraser Charles), German Public (50%) and United Kingdom Public (50%), received approval for the acquisition of a freehold interest in approximately 19.8 hectares of land at 30 & 40 Tairere Road, Ti Point, Auckland. The vendor was Janice Fay Haslam, New Zealand (100%) and Haslam (Janice Fay), Haslam (Tracy) and Mason (David Hamilton), New Zealand (100%): consideration was $4,050,000. The OIO states: “Ute and Fraser Charles Partridge have recently immigrated to New Zealand and intend to acquire the land to use as one of their two homes. The land includes a boutique vineyard that the Partridges intend to operate. The Partridges intend to reside indefinitely in New Zealand”. See our March 2015 commentary for details of a further purchase by the Partridge family (presumably not The Partridge Family. Ed).

Accolade Wines New Zealand Limited, United States of America (38%), Australian Public (19%) and various overseas persons (43%), received approval for the acquisition of a freehold interest in approximately 30 hectares of land at 360 Delta Lakes Heights, Renwick. The vendor was the Wickham Family Trust, New Zealand (100%): consideration was withheld under s(9)(2)(b)(ii) and/or s9(2)(ba)(i) of the Official Information Act. The OIO states: “The Applicant intends to develop the vineyard located on the land and incorporate it within its existing Marlborough vineyard operation”. See our March 2014 commentary for details of Accolade’s purchase of the Mud House wine labels and leasehold interest in a number of Marlborough vineyards.

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