March 2006 decisionsFairfax buys Trade Me for $700 million PEP buys Tegel Foods for $250 million Allco Funds Management buys into Strategic Investment Group ANZ Terminals buys bulk liquid chemical storage operator, Kaneb Terminals Macquarie Goodman buys 50% of Viaduct Basin company… Multiplex buys Albany building Ernslaw One buys lifestyle property for Ruatoria manager Retrospective and new approvals for Gibbston Valley developments Retrospective approval for Great Barrier Island tourist lodge owned by U.K. trust
Fairfax buys Trade Me for $700 millionIn a major purchase, which had headline writers busy and left a number of New Zealanders considerably wealthier, John Fairfax Holdings Limited, owned 63.5% in Australia, 30.2% by “various overseas persons”, 6.2% in the U.K., and 0.1% in Aotearoa, has approval to acquire Trade Me Limited, Online Services International Limited, and Old Friends Limited., Wellington for $700,000,000.
According to the OIO,
John Fairfax Holdings Limited (Fairfax) proposes to acquire 100 percent of Trade Me Limited, Online Services International Limited, and Old Friends Limited, which carry on internet businesses. Fairfax’s main reasons for the acquisition are that it fits with Fairfax’s current strategy of reshaping Fairfax’s business mix as part of the developing initiative into the internet in all of the markets that it operates. The acquisitions are likely to complement Fairfax’s existing internet business, resulting in Fairfax becoming a more diversified media company.
Trade Me, the local equivalent of eBay, was extremely successful, branching out into car sales, real estate and jobs.
[Decision number 200610035.] PEP buys Tegel Foods for $250 millionThe latest prey of the aggressive and rapidly expanding Australian investment company, PEP, is the largest chicken meat producer in Aotearoa, Tegel Foods. PEP is omnivorous: its previous acquisitions in Aotearoa have been in the residential care and retirement village sector (for example, see our commentaries on the June and August 2005 decisions).
The formal consent by the OIO is for NZ Poultry Holdings Limited, owned 64.8% in the U.S.A., 18.9% in Australia, 9.75% in the U.K. and 6.55% by “various overseas persons”, to acquire Tegel Foods for $250,000,000 from Wattie’s Investment LLC, itself owned by H.J. Heinz Company of the U.S.A..
The acquisition includes 112 hectares of freehold comprising: · 19 hectares at Hautere Cross Road, Otaki, and Buller Road, Te Horo, Wellington; · 90 hectares at Wortley Road, Lepperton, 585 Manutahi Road, Waitara, 179 Brown Road, Waitara, and 55 Hickman Road, Onaero, Taranaki Registry; and · 3.5 hectares at Flanagan Road and Tegal Road, Papakura, Auckland;
and 48 hectares of leasehold comprising: · 46 hectares at Dunns Crossing Road, Christchurch; and · 1.6 hectares at Mayne Street, Waitara, Taranaki.
According to the OIO,
Pacific Equity Partners Pty Limited (PEP) on behalf of Pacific Equity Partners Fund II (Fund II) and Pacific Equity Partners Fund III (Fund III), funds managed by PEP, proposes to acquire up to 100 percent of the shares of Tegel Foods (Tegel). The Applicant will be a portfolio company owned by Fund II and Fund III established to acquire the shares in Tegel. Tegel, a wholly owned subsidiary of H.J. Heinz Company (Heinz), is a fully integrated poultry producer involved in the breeding, hatching, feeding, growing, processing, and marketing of chicken and turkey products. Tegel’s products include fresh, frozen and cooked whole chickens, chicken portions, and other value added products.
PEP’s investment strategy is to invest in business opportunities where PEP’s management expertise, capital resources and understanding of financial structuring enables it to improve the operating performance and create value in the relevant business. PEP’s strategy for Tegel is to operate the business substantially as it has been operated to date and successfully implement growth and productivity improvement strategies.
Tegel has been attacked by animal rights groups for the conditions on its poultry farms.
[Decision number 200610036.] Allco Funds Management buys into Strategic Investment GroupAllco Funds Management Limited, owned by Allco Principals Trust of Australia, has approval to acquire Strategic Investment Group Limited, Auckland for a suppressed amount. From the statistics supplied, however, it appears that a reasonable estimate of the price is $356,700,000.
Although the approval is for 100% acquisition, in fact it will acquire only 50% at this stage, but it will control a company which will own 100% of the finance company, Strategic Finance Ltd, through a “restructuring”. According to the OIO,
Allco Funds Management Limited (Allco) proposes to acquire 50% of Strategic Investment Group Limited (SIGL). SIGL’s only asset is a holding of approximately 88% of the shares in Strategic Finance Limited (SFL). It is intended that, following a restructuring, SIGL will hold 100% of SFL prior to Allco acquiring the shares in SIGL.
SIGL is a financial services group with offices in Wellington, Auckland and Sydney. Its principal activities include finance and corporate advisory services with a principal focus of providing debt finance for property development and property investment purposes.
Allco is a wholly owned subsidiary of Allco Principals Trust, the beneficiaries of which own Allco Finance Group Limited (Allco Finance). Allco Finance is a privately owned Australian investment bank and financial services group which provides structured finance solutions in Australia and internationally. Allco Finance’s activities are grouped into five main operating divisions: Asset Finance, Funds Management, Capital Markets Finance, Allco Equity Partners, and Allco Principal Finance. Since its establishment in 1979, Allco Finance has arranged finance for assets worth more than US$50 billion. Allco Finance currently manages equity investment funds with a total value in excess of A$2.5 billion. Allco Finance views the transaction as an opportunity to expand its New Zealand business (its Alleasing business has a New Zealand office). Given the similarities of the Allco Finance and the Strategic businesses, a number of synergistic opportunities are possible to expand in both New Zealand and Australia.
Allco was awarded the Australasian 2006 Golden Toilet Brush Award for services against cleaners by Australian and New Zealand unions representing cleaners as part of their International Justice for Cleaners Day. They said: “Allco stands out as the only major property owner not prepared to talk about the Clean Start: Fair Deal for Cleaners principles”. Rallies at Allco offices around Australasia tried to hand over golden toilet brushes but received receptions varying from accepting the brush in the hope that the rallying workers would go away, to ejection by police. In Wellington a toilet brush award was delivered to Strategic Finance’s General Manager. (See http://www.sfwu.org/index.asp?pageID=2145839489, accessed 29 October 2006.)
[Decision number 200610028.] ANZ Terminals buys bulk liquid chemical storage operator, Kaneb TerminalsANZ Terminals Pty Limited, owned 59.4625% by Chan Tan Ching Fen of the U.K., 33% by Edward Denvir Doherty of the U.S.A., 6.03% by The Katherine D. Jacullo Children’s 1993 Irrevocable Trust of the U.S.A., and 1.5075% by David Widener of the U.S.A., has approval to acquire Kaneb Terminals Limited, including 1.0 hectares of freehold at 212-220 Gracefield Road, Lower Hutt, Wellington and 0.63 hectares of leasehold at 8 Brigham Street, Auckland for $9,238,872 from Support Terminals Operating Partnership, LP owned by Valero, LP of the U.S.A.
According to the OIO,
ANZ Terminals Pty Limited (ANZT) has entered into an agreement with Support Terminals Operating Partnership, LP (STOP), which is the registered holder and beneficial owner of all the shares in Kaneb Terminals Limited (Kaneb), to acquire all the shares in Kaneb. By virtue of the acquisition, ANZT will also acquire an interest in properties located at Lower Hutt, Mt Maunganui, New Plymouth, and Auckland. The Lower Hutt and Auckland properties are sensitive land for the purposes of the Overseas Investment Act 2005. STOP owns and operates petroleum products, terminals, and pipelines in the United States of America, the United Kingdom, Canada, the Netherlands, and the Netherlands Antilles. STOP is selling its shares in Kaneb as the relevant assets do not fit its strategic vision. ANZT is entering into the transaction because of its knowledge of the assets and management.
[Decision number 200610030.] Macquarie Goodman buys 50% of Viaduct Basin company…Macquarie Goodman Nominee (NZ) Limited and/or Macquarie Goodman Holdings (NZ) Limited, owned by Macquarie Goodman Nominee (NZ) Limited which in turn is owned 25.29% by minority shareholders in Australia, 2.5% by Macquarie Bank Limited of Australia, 0.12% by “various overseas persons”, 69.74% by minority shareholders in Aotearoa, and 2.35% by Goodman Holdings of Aotearoa, has approval to acquire up to 50% of Balmon Holdings Limited, including 1.0215 hectares of leasehold at Viaduct Harbour Avenue, Auckland for $44,700,000 from the existing shareholders of Balmon Holdings Limited, owned 50% by Kevin Patrick McDonald and Gregory Noel Rathbun as trustees of the Eamon Trust and 50% by Ronald John MacDonald and Gregory Noel Rathbun as trustees of the Balfour Trust, all of Aotearoa.
The OIO states:
The Applicant has entered into an agreement to acquire 50% of the shares in Balmon Holdings Limited (Balmon). Subsidiary companies of the Balmon group have leasehold interests in the subject land known as the Viaduct Corporate Centre. Balmon, in conjunction with Viaduct Harbour Holdings Limited (who own the freehold title to the land), is in the process of undertaking a subdivision of the land. The land is used as commercial office space. The acquisition is consistent with the Macquarie Goodman Group’s/Macquarie Goodman Property Trust’s strategies of owning well-located, good quality commercial property and the continued expansion by the Macquarie Goodman Group/Macquarie Goodman Property Trust into New Zealand across the spectrum of its investment, development, and management business.
[Decision number 200610029.] … and restructuresTwo related decisions involve various Macquarie Goodman associated companies reorganising the ownership of their properties.
In one, Macquarie Goodman Property Trust has approval to acquire “certain properties” in Auckland (see below) for $320,000,000 from the Macquarie Goodman Group. [Decision number 200610033.]
In the other, the Macquarie Goodman Group has approval to acquire up to 45% of the units of the Macquarie Goodman Property Trust for $48,300,000 “together with an additional fee pursuant to the Distribution Reinvestment Plan (final fee still to be determined)” from existing unit holders in the Macquarie Goodman Property Trust. This second acquisition includes: · 40 hectares of freehold comprising
· 44 hectares of leasehold at 60 Westney Road, Manukau, Auckland [Decision number 200610034.]
The Macquarie Goodman Property Trust is owned 35.28% by minority shareholders in Australia, 2.04% by Macquarie Bank Limited of Australia, 0.09% by “various overseas persons”, 60.68% by minority shareholders in Aotearoa, and 1.91% by Goodman Holdings of Aotearoa
The Macquarie Goodman Group is owned 53.92% by minority shareholders in Australia, 28.72% by “various overseas persons”, 8.3% by Macquarie Bank Limited of Australia, 7.81% by Goodman Holdings of Aotearoa and 1.25% by minority shareholders in Aotearoa.
In both cases, the OIO states:
The Macquarie Goodman Group (MGQ) is a group created through the stapling of Macquarie Goodman Industrial Trust (MGI) and Macquarie Goodman Management Limited (MGM). The stapled units in MGQ are listed on the Australian Stock Exchange. MGQ invests in commercial and industrial properties in Australia and New Zealand. The Macquarie Goodman Property Trust (MGP) is a New Zealand Stock Exchange listed property trust. MGP is managed by Macquarie Goodman (NZ) Limited (MGNZ), a wholly owned subsidiary of MGM. MGQ currently holds approximately 30% of the units in MGP. MGP has property commercial and industrial investments in New Zealand. MGP and MGQ propose to enter in the following transactions:
(a) The sale by MGQ (and its subsidiaries) to MGP of certain properties comprising: (i) properties which are 100% owned by MGQ or which MGQ currently has under contract to purchase (the MGQ Properties); (ii) properties or interests in properties which are currently co-owned (by MGP and MGQ) and in which MGQ will transfer its 50% interest to MGP; and (iii) properties which are currently owned by Highbrook Development Limited (HDL) (in which MGQ has a 75% interest) will be transferred to Highbrook Business Park Limited (HBPL) (MGP will have a 75% interest in HBPL). (b) The issue to MGQ (as part consideration for the properties) of approximately $48.3 million of additional units in MGP; and (c) The issue to MGQ of further units in MGP by way of a dividend reinvestment plan, a unit purchase plan to be offered by MGP, and the payment of management fees by MGP.
MGQ wishes to rationalise and consolidate its New Zealand investments. Its future investment in the properties will be through its unit holding in MGP. The transactions will result in MGP significantly growing its property portfolio.
MGQ also seek consent to acquire further units in MGP from time to time by way of a dividend reinvestment plan, a unit purchase plan, and upon receipt of the performance payment. Multiplex buys Albany buildingMultiplex Funds Management Limited as custodian of the Multiplex Albert Street Landowning Trust, owned in Australia, has approval to acquire 0.56 hectares at 9-11 Corinthian Way and 7 Mercari Way, Albany, Auckland for $29,986,568 from Neil Properties Limited owned by the Tiong Family of Malaysia. The land “adjoins land that is listed, or in a class listed, as a reserve, a public park, or other sensitive area”.
The OIO states:
The Applicant proposes to acquire the subject property which is used as commercial office, retail and carparking, to add it to its portfolio of New Zealand commercial properties. The Applicant advises that the acquisition provides an opportunity to acquire a mixed commercial/retail property in the Albany business district, a fast growing precinct where the Applicant does not have any current investments. The acquisition of this property is the sixth acquisition of commercial property in New Zealand for the Multiplex Group.
[Decision number 200610026.] Ernslaw One buys lifestyle property for Ruatoria managerErnslaw One Limited, owned by the Tiong Family of Malaysia, has approval to acquire 6.0 hectares at 334 Te Araroa Road, Ruatoria, Gisborne, for $324,375 from Phillip Graham Aupouri of Aotearoa.
According to the OIO,
The Applicant, who manages 49,000 hectares of forest in the Gisborne/East Coast region, proposes to acquire the subject property as a residence for the Applicant’s Ruatoria Forest manager and his family. The land is situated in close proximity to the Applicant’s Ruatoria Forest, which extends in a number of blocks as far as Te Araroa being 1 hours drive north. The Applicant proposes to establish a fire store on the land where firefighting equipment will be stored. In the event of a fire in the Ruatoria Forest, firefighting will be managed from this land.
[Decision number 200610027.] Retrospective and new approvals for Gibbston Valley developmentsIn a complex set of six approvals, the OIO has given a US investor, Philip Griffith and a number of associated entities, retrospective approval to increase his present and future shareholding in Gibbstown Valley Wines Ltd (GVWL), buy other properties, and to carry out a development on them.
Gibbston Valley Wines owns 40 hectares at Bendigo Station, Loop Road, north of Cromwell; Kawarau Gorge SH6; and Gibbston Highway, Gibbston Valley, Central Otago. It “operates a vineyard and winery operation with associated restaurant and tourist activities”.
Four of the consents appear to be retrospective, approving actions he took several years ago without the necessary legal niceties, which were presumably uncovered by his new applications.
After these transactions, Gibbston Valley Wines is owned as follows:
Since 2000, Griffith has been increasing his shareholding in Gibbston Valley Wines without OIO approval. Three of the retrospective approvals now given by the OIO are for the following:
· “In March 2000, Mr Griffith acquired 202,630 shares in GVWL increasing Mr Griffith’s shareholding in GVWL to 25.79%. The shares in GVWL were issued in return for funds Mr Griffith contributed to GVWL to enable GVWL to undertake capital development.” The funds contributed were $243,156. [Decision number 200610020.] · “In July 2000, 1,587,837 convertible notes were issued by GVWL to Mr Griffith in consideration for funds he contributed to GVWL. The convertible notes converted into shares in GVWL on 31 July 2004, increasing Mr Griffith’s shareholding in GVWL to 46.71%. The shares in GVWL were issued in return for funds Mr Griffith contributed to GVWL to enable GVWL to undertake capital development.” This time the funds contributed were $1,905,404. [Decision number 200610022.] · “In August 2004, 794,492 convertible notes were issued by GVWL to the Philip D Griffith Family Trust in consideration for funds contributed to GVWL. These convertible notes are due to convert into shares in GVWL in August 2009, increasing Mr Griffith’s, and his associated shareholding in GVWL to 48.56%. The shares and convertible notes in GVWL were issued in return for funds Mr Griffith contributed to GVWL to enable GVWL to undertake capital development.” The funds contributed in this case were $953,390. [Decision number 200610023.]
In addition the following consents were made by the OIO. One of them was retrospective (this was not clear from the decision sheet, but can be deduced from the statistical information provided).
Gibbston Valley Lodge NZ LLC, owned by The Phillip D Griffith Family Trust of the U.S.A. has approval to acquire two adjoining blocks of land at 1850 Gibbston Highway, Gibbston Valley, Otago from Glenroy Station Limited of Aotearoa: · 2.0 hectares for $562,500 – a retrospective approval [Decision number 200610021] · 2.3 hectares for $675,000 [Decision number 200610025]
In both cases, according to the OIO,
The Applicant is an associated person of Gibbston Valley Wines Limited (GVWL) by virtue of Mr Griffith’s interests in the Applicant and GVWL. GVWL owns land adjacent to the subject land on which GVWL operates a vineyard, a cheesery, and a restaurant. The Applicant proposes to construct, and operate a luxury lodge on the subject land and the adjoining land. Resource consents have been granted to the Applicant. The Applicant intends that the luxury lodge will complement the activities of GVWL together with other visitor attractions in the Gibbston Valley and the wider Queenstown region.
Gibbston Valley Wines Limited also has approval to acquire 10.5 hectares at Schoolhouse Terrace, Bendigo, Otago for $354,375 from John Charles Perriam and Heather Lorna Perriam of Aotearoa.
The OIO states that
The Applicant operates a vineyard and winery operation with associated restaurant and tourist activities in Central Otago. The Applicant has previously acquired land totalling 39.8288 hectares located in Central Otago. The subject property is part of a viticultural subdivision of Bendigo Station undertaken by the vendor. The subject property was previously used by the vendor for pastoral grazing. By owning its own land and growing more of its own grapes the Applicant aims to exercise greater control over the vines and the supply and the quality of those grapes. The acquisition will ensure a continuation/enhancement of the benefits created by the Applicant’s business operations including increased market competition, the development of new export markets and the creation of new employment opportunities. It will also result in economies of scale through the efficient utilisation of the Applicant’s resources.
[Decision number 200610024.] Retrospective approval for Great Barrier Island tourist lodge owned by U.K. trustA change of the trustee of a family trust has uncovered a previous unauthorised change, which the OIO has given retrospective approval for.
It appears (though it is not made clear) that the current change is that St George Trustees Limited, a professional trustee based in Jersey, is being made trustee of the Chiquita Trust of the U.K., and accordingly applied for and has received approval to acquire 42 hectares at Great Barrier Island, Auckland for $1,140,000 from Stewart Graeme Wilson as (former) trustee for the Chiquita Trust of the U.K. [Decision number 200610032.]
The unauthorised change made Stewart Graeme Wilson of the U.K. trustee for the Chiquita Trust of the U.K. in 1999. He has been given retrospective approval to acquire 42 hectares at 29 Kaitoke Lane, Great Barrier Island, Auckland for $1,140,000 from John Prebble of Aotearoa. [Decision number 200610031.]
The OIO states in both cases:
Ian Muir Wilson (Dr Wilson), a New Zealand citizen residing in the United Kingdom, acquired the subject land in 1997. In 1998, Dr Wilson transferred the property to the Chiquita Trust, a family trust settled by Dr Wilson’s mother primarily for Dr Wilson and his children. The trustee of the Chiquita Trust in 1998 was a New Zealand citizen. In 1999, the existing trustee retired and a new trustee (Stewart Graeme Wilson, Dr Wilson’s brother and a United Kingdom citizen) was appointed. The new trustee was an overseas person. A transfer of the land was registered in the name of the new trustee. The need for consent under the Overseas Investment Regulations 1995 was overlooked. A tourist lodge was constructed on the property in 2000, namely Mount St Paul Lodge, which has operated since April 2002. The transaction involves a change of the trustee of the Chiquita Trust and not a change in the beneficial ownership of the land in which Dr Wilson and his children are the primary beneficiaries. The transfer to Stewart Graeme Wilson has not altered the use of the property, which is used as an accommodation lodge.
In the case of the transfer to St George Trustees, the OIO also states:
It is now proposed that Stewart Graeme Wilson will retire as trustee of the Chiquita Trust, and be replaced by a professional trustee based in Jersey, St George Trustees Limited… The transfer to Stewart Graeme Wilson and St George Trustees Limited has and will not alter the use of the property, which is used as an accommodation lodge. Summary statisticsAll investments The gross and net value of investment approved in the year to March 2006 is considerably higher than for the previous March year. By far the greatest part of the value of the approvals is for sale from one overseas investor to another.
Note: In addition there were five retrospective approvals granted during the month. This involved a gross consideration of $4,804,450 (land area 164 hectares) and a net investment of $4,162,036 (53 hectares).
Investment involving land Gross and net sales of land approved by the OIO during the years to March have fallen in area.
Note: In addition there were five retrospective approvals granted during the month. This involved a gross land area 164 hectares (consideration of $4,804,450), a net 53 hectares ($4,162,036).
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Compiled by: Campaign Against Foreign Control of Aotearoa, P. O. Box 2258 Christchurch. |
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