December 2006 decisionsSuncorp-Metway of Australia buys Promina Group for $8.94 billion Another private equity buyout of aged care facility: CVC buys DCA Cavotec buys innovator Mooring Systems Ltd MFS buys S8 which bought Gullivers Travel Australian owners dominate new owner of Porter Heights ski field CDL buys the Rendezvous Hotel, Auckland Restructuring of interests by Macquarie Goodman Middle Mount Forest buys 670 ha. from Dunedin City Council’s City Forests Holcim buys quarry in Pukekohe
Suncorp-Metway of Australia buys Promina Group for $8.94 billionSuncorp-Metway Limited of Australia has approval to acquire Promina Group Limited for $8,940,000,000.
According to the OIO,
Suncorp-Metway Limited (Suncorp) has entered into a merger implementation agreement (agreement) with Promina Group Limited (Promina). The agreement formalises a proposal for Suncorp to acquire 100% of ordinary shares in Promina by way of a scheme of arrangement, to be undertaken in Australia.
The Promina Group of companies includes Promina Group Holdings (NZ) Limited, a wholly-owned New Zealand based subsidiary of Promina. Promina’s New Zealand operations include Promina, Asteron, an interest in AA Insurance, New Zealand Guardian Trust and Tyndall Investment Management. Suncorp, which is a leading Australian financial services firm focusing on retail consumers and small-to-medium businesses, views the acquisition of Promina as creating a larger diversified financial services group allowing for the expansion of value creation opportunities.
Formerly called the Royal and Sun Alliance Insurance Group, this is one of the largest financial corporations in Aotearoa which took over many other companies in the last decade. See for example our commentary on the September 2004 decisions for a previous acquisition by it. Its web site states:
Promina Group is one of New Zealand’s largest insurance and financial services organisations. In New Zealand, Promina Group’s brands include Vero, Asteron, Guardian Trust, Tyndall, Vero Marine, Vero Liability, AA Insurance, SIS, AXIOM, Mariner, Comprehensive Travel Insurance and Autosure. Promina Group employs over 1,700 staff in New Zealand.
(http://www.promina.com.au/dirp/promina/promina.nsf/Content/New+Zealand+Businesses)
[Decision number 200620085.] Another private equity buyout of aged care facility: CVC buys DCACAID Pty Limited, owned 54.7% in the U.S.A., 24.8% by “Various overseas persons”, 8.15% in the U.K., 6.65% in Singapore, 3.2% in the Netherlands, and 2.5% in Canada, has approval to acquire the DCA Group Limited for $201,729,100. The DCA Group Limited was owned 99.24% in Australia and 0.76% by “Various overseas persons”.
The OIO states:
The Applicant, CAID Pty Limited (CAID) is a special purpose vehicle incorporated in Australia by CVC Capital Partners (CVC) for the purpose of acquiring shares in the Australian listed company, DCA Group Limited (DCA). DCA is the ultimate parent company of DCA Healthcare New Zealand Limited, a New Zealand company incorporated in July 2005 by DCA in order to purchase Guardian Healthcare Group Limited (Guardian). Guardian is a company that operates a healthcare and elderly accommodation business in New Zealand. The proposal meets CVC’s investment strategy of investing in business opportunities where CVC’s management expertise, access to capital and understanding of financial structuring enables CVC to create value and improve the operating performance of those businesses. CVC proposes to support DCA’s management growth strategies. The proposal is likely to result in the continued support and implementation of DCA’s management’s growth strategies.
According to CVC, it paid A$2.7 billion for the whole of the Australian-based DCA parent company (CVC press release, “CVC agrees to acquire DCA for A$2.7 billion”, 25/9/06, http://www.cvc.com).
This is the third change of owner of Guardian Healthcare since 2004. Investment company Pacific Entity Partners bought out the formerly locally owned Guardian in 2004 for $110 million. Guardian was at that time “New Zealand’s largest private owner/operator of rest homes and hospitals”. Guardian under PEP took over Care and Independence rest homes for $31,540,000, in June 2005. Then DCA bought Guardian from PEP less than a year later, with OIC approval in August 2005, for $300 million, at least double the price PEP paid. See our commentary for that month for further details of these transactions. DCA, which was listed on the Australian Stock Exchange, seems to have substantially reduced the value of its purchase in the one year it owned it – down to just over $200 million.
It was at least a specialist in running such facilities. The new owner is a specialist in making money.
The purchase includes 11 hectares comprising: · 3.0 hectares at 19 Liston Avenue, Taupo, Bay of Plenty; · 5.5 hectares at 921 Tararu Road, Thames, Coromandel; · 0.50 hectares at 5 Bowlers Wharf Lane, Papakowhai, Porirua, Wellington; · 1.1 hectares at 142 Whangaparaoa Road, Red Beach, Orewa, Auckland; and
[Decision number 200620076.] Cavotec buys innovator Mooring Systems LtdCavotec Group Holdings N.V., owned 60.42% in Italy, 19.52% in Sweden, 14.75% by “Various overseas persons”, 3.01% in Norway, and 2.3% in the U.S.A., has approval to acquire up to 80% of the shares of Mooring Systems Limited, Canterbury for $203,700,000 from existing shareholders. Mooring Systems Ltd was owned 97.23% in Aotearoa and 2.77% by “Various overseas persons”.
The deal is described as a merger, and is structured as a takeover by Mooring Systems of Cavotec, but it is hard to see how Mooring Systems will retain significant influence in a company several times its size. Mooring Systems has developed a mooring system which replaces ropes and cables for mooring.
By February 2007 Cavotec was complaining that its European shareholders would have to pay tax in Aotearoa as a result of its new headquarters here:
Cavotec MSL was considering its dividend policy, [Cavotec group director of finance John] Polatz said. There were tax issues from listing the combined entity in New Zealand. As a Dutch company with mostly European shareholders it had been able in the past to distribute cash dividends to shareholders who paid their own tax on the dividends.
But now if the dividends from the Dutch holding company were sent to its holding company in New Zealand and then sent out to shareholders, the cash amount to shareholders would reduce about 28% and shareholders would pay tax on it again.
In addition, the earnings would have been taxed in the countries in which they were produced.
“We are looking at ways of fixing that …” Polatz said.
(Press, “Cavotec MSL tips 10% international profit rise”, by Marta Steeman, 8/2/2007, p.B5)
The OIO states:
Mooring Systems Limited (MSL) a company listed on the New Zealand Stock Exchange proposes to merge with Cavotec Group Holdings NV (Cavotec) a closely held company headquartered in the Netherlands. The proposal will be effected by MSL acquiring all of the shares in Cavotec, with the consideration to the Cavotec shareholders being the issue of MSL shares.
MSL and Cavotec consider that the proposed merger will further MSL’s and Cavotec’s existing business relationship and provide a number of synergies and benefits. Cavotec is an international group operating in the design and manufacture of mobile power supply solutions whilst MSL is a company whose activities include the development, testing and sales of shore based and ship based automatic mooring systems.
[Decision number 200620081.] Nikko of Japan buys HirequipNikko Principal Investments Limited, owned 60.53% in Japan, 15.03% in the U.S.A., 11.2% by “Various overseas persons”, 7.6% in Canada, and 5.64% in the U.K., has approval to acquire Hire Equipment Group Limited for $166,937,250 from Hirequip No.1 Limited, owned in Aotearoa by Hirequip New Zealand Limited.
The OIO states:
Nikko Principal Investments Limited (NPIL) proposes to acquire 100% of the shares in Hire Equipment Group Limited (HEGL) the holding company for a group of companies that conduct business under the general equipment hire brands “Hirequip”, “Projex” and “Power Hire” in New Zealand. The acquisition is part of NPIL’s strategy to build a significant private equity business in Australia and New Zealand.
A competitor, Hirepool, was bought by Australian investment company, Next Capital, earlier in the year – see our commentary for July 2006 for further details.
[Decision number 200620078.] MFS buys S8 which bought Gullivers TravelMFS Limited of Australia has approval to acquire S8 Limited for $236,365,750.
S8 says it is the largest travel group in Australasia, after engulfing large local firm, Gullivers Travel Group, in July 2006 (see our commentary for that month for further details). The price given here for the MFS purchase of S8 appears to be just for its New Zealand operation: the price is identical to what S8 paid for Gullivers Travel.
According to the OIO,
MFS Limited (MFS) proposes to acquire 100% of S8 Limited (SEL) a company listed on the Australian Stock Exchange. Upon completion of the Takeover Offer of SEL by MFS, MFS would indirectly control 100% of the securities in Gullivers Travel Group Ltd (Gullivers). SEL following its recent takeover of Gullivers is the largest vertically and horizontally integrated travel group in Australia and New Zealand. SEL’s portfolio includes Harvey World Travel, Transonic Travel, Travelscene and Gullivers in New Zealand. Gullivers portfolio includes United Travel, Holiday Shoppe, Gullivers Holidays and Gullivers Ticketing. MFS believes that the merger with SEL represents an opportunity to create a market leading, fully integrated travel group.
[Decision number 200620080.] Australian owners dominate new owner of Porter Heights ski fieldBlackfish Limited has approval to acquire 708 hectares of leasehold at the Southern end of Craigieburn Range, Canterbury for $1,710,000 from Porter Heights Ski Area Limited. The land, which is the Porter Heights ski field, about an hour’s drive from Christchurch, includes and adjoins land “held for conservation purposes”.
Blackfish is owned 21.671% by Duncan James Bull, 21.6645% by Simon Thomas Harvey, and 21.6645% by Christopher Peter Rose, all of Australia, and 20% by Michael James Sleigh, 10% by Timothy Paul Allan, 1% by Frederick David Justin Murray, 1% by David Carson Murray, 1% by Humphrey John Davy Rolleston, 1% by Richard George Nelson Rookes, and 1% by Christopher David Milne, all of Aotearoa.
Porter Heights Ski Area Ltd is currently owned 25% by Ashley David Mazey and Sharon Lois Mazey, 25% by Peter Gerald Manning and Kaye Elizabeth Manning, 25% by Diane Elizabeth Davies, and 25% by Mark John Bloor and Kathryn Jean Bloor, all of Aotearoa.
The OIO states:
Blackfish Limited (Blackfish) proposes to acquire the business and assets of Porter Heights Ski Area Limited which includes the Porter Heights ski area (Porter Heights) located on the southern end of the Craigieburn Range approximately 1 hours drive west of Christchurch. Blackfish is proposing to introduce additional investment for development purposes to redevelop the Porter Heights ski area, particularly for visitor accommodation, to further cater for the demand for high quality alpine skiing and on-site accommodation in New Zealand.
[Decision number 200620086.] CDL buys the Rendezvous Hotel, AucklandCDL Hospitality Trusts, owned 95.77% in Singapore, and 4.23% by “Unknown Overseas Persons”, has approval to acquire the Rendezvous Hotel, cnr Vincent Street and Mayoral Drive, Auckland for $113,000,000 from Abacus Group Holdings Limited of Australia.
The OIO states:
The Applicant is a Singapore based publicly listed trust specialising in investing in property based assets in the hospitality sector and actively managing those assets to enhance income and capital growth. The Applicant proposes to acquire the Rendezvous Hotel located in Auckland as part of its strategy to diversify its property assets and acquire quality hotel and hospitality assets in Australasia and internationally.
[Decision number 200620074.] Restructuring of interests by Macquarie GoodmanHighbrook Business Park Limited, owned 76.3893% in Aotearoa, 15.3494% in Australia, 6.322% by “Various overseas persons”, and 1.9393% in Aotearoa by Goodman Holdings, has approval to acquire 2.1 hectares at Highbrook Drive, East Tamaki, Auckland initially as a leasehold interest, and subsequently as a freehold interest for $4,975,000 from Highbrook Development Limited (Highbrook), owned 46.665% in Australia, 21.54% by “Various overseas persons”, 25.1875% in Aotearoa by minority shareholders, and 6.6075% in Aotearoa by Goodman Holdings. The land adjoins “a reserve, a public park, or other sensitive area”.
According to the OIO,
Macquarie Goodman Group (MGQ), which owns 75% of Highbrook, wishes to rationalise and consolidate its New Zealand investments and to achieve this is proposing to sell interests in certain properties (including the subject property) to MGP. Its future interests in the property will be through its unit holding in MGP. The Fisher Trust will acquire a 25% interest in the property. The Fisher Trust is an associate of MGP through its joint venture with MGP in Highbrook. The transactions will result in MGP growing its property portfolio.
The consequential benefits which have accrued from previous transactions by MGQ and MGP that were approved under the Overseas Investment legislation are likely to continue with the addition of the proposed investment.
The proposal is likely to have flow on benefits for the commercial property development and construction industry.
All of which doesn’t make much sense on its own. Highbrook Business Park Ltd is owned 75% by MGP (the Macquarie Goodman Property Trust) according to a previous OIO approval in March 2006 (see our commentary for that month for details).
[Decision number 200620084.] Middle Mount Forest buys 670 ha. from Dunedin City Council’s City ForestsMiddle Mount Forest Limited, owned in Switzerland by Heinrich Martin Henni, has approval to acquire 670 hectares at Heenan Road, Opio, Southland for $3,238,000 from City Forests Limited, owned by Dunedin City Council.
The OIO states:
Middle Mount Forest Limited (Middle Mount) proposes to acquire the subject property which has 516.9 hectares planted in radiata pine and 6.9 hectares planted in douglas fir between 1982 and 1985. Middle Mount has previously received consent in April 2006 to acquire 802.957 hectares of land for a forestry investment.
Middle Mount advises that harvesting of the forest is scheduled to be undertaken between the years 2008 to 2012. Middle Mount advises that upon completion of harvesting it is likely that half of the property will be planted while half will be converted to farming use. Middle Mount advises that the acquisition is likely to provide economies of scale to Middle Mount’s New Zealand forestry investments.
The April 2006 decision by the OIO gave approval to Middle Mount to acquire 801 hectares at Mt Trotter Road and Stenhouse Road, Palmerston, Otago for $2,570,000. See our commentary for that month for further details.
[Decision number 200620079.] Land for forestry· In retrospective approval by the OIO, Olsen and Company Limited as agent for NZFIT Limited, owned by Australia Post Superannuation Scheme, has approval to acquire 155 hectares at 183 Jensen Road, Rotoma, Bay of Plenty for $1,600,000 from Equine Estate Limited, owned in Switzerland by Rita Ulmke. According to the OIO, “Olsen and Company Limited (Olsen) acquired the land on 21 February 2006 to enable the land to be secured for the benefit of the NZFIT Limited (NZFIT) and in anticipation of the NZFIT obtaining consent to acquire the land. The party that sold the land to Olsen was not prepared to sell the land to the Applicant subject to obtaining consent under the Overseas Investment Act 2005. Olsen is the holding company for the forest advisory and management business carried on by PF Olsen and Company Limited. NZFIT, which is ultimately owned by the Australia Post Superannuation Scheme, proposes to acquire the subject property which contains approximately 122 hectares that was established in pinus radiata forestry in 1992. Harvesting is scheduled for 2022/23. NZFIT has been formed for the purpose of investing in New Zealand forests and will form part of a wider investment portfolio for the beneficial owners of NZFIT.” [Decision number 200620083.] Land for wine· Gibbston Valley Lodge NZ LLC, owned in the U.S.A. by The Phillip D Griffith Family Trust, has approval to acquire 10 hectares at 16 Resta Road, Gibbston Valley, Central Otago for $2,500,000 from Andrus Family Trust NZ Holdings Limited, owned 55% by the Andrus Family LLC, 15% by R Gary Andrus Revocable Trust, 15% by Andrus Family Children’s Trust, and 15% by Christine Lorraine Metz Andrus, all of the U.S.A. According to the OIO, “The Applicant is an associated person of Gibbston Valley Wines Limited (GVWL). This is by virtue of Philip Griffith’s interest in the Applicant as the sole trustee of the sole shareholder, and by virtue of Philip Griffith’s interest in GVWL as a director and shareholder. GVWL owns land adjacent to the subject land, on which GVWL operates a vineyard, a cheesery and a restaurant. The Applicant is currently planning the construction of a luxury lodge on nearby land. The Applicant proposes to acquire the subject land upon which a vineyard and winery is currently operated. The Applicant proposes to further develop the land. The acquisition is likely to complement the Applicant’s and GVWL’s operations.” The same investor was given approval for several transactions including land purchases and changes in ownership, some retrospective, in March 2006. See our commentary for that month for further details. [Decision number 200620073.] Holcim buys quarry in PukekoheHolcim (New Zealand) Limited, owned 66.4% by minority shareholders in Switzerland, 23.6% by Thomas Schmidheiny of Switzerland, and 10% in the U.S.A. by Capital Group Companies, has approval to acquire 61 hectares at 81 Settlement Road, Pukekohe, Auckland for $2,800,000 from Malcolm Douglas and Janet Christina Douglas of Aotearoa.
The OIO states:
Holcim New Zealand proposes to acquire the land for the quarrying of aggregate. This quarry is seen by Holcim as an eventual replacement for the existing Bombay Quarry site. Holcim anticipates that the acquisition of the land will enable it to secure the medium term supply of aggregates for Holcim and the broader aggregates market. The resources are required to maintain a secure supply of high grade aggregate at competitive prices that are suitable for use in both structural concrete and roads.
[Decision number 200620082.] Other rural land sales· Keith Hamnett and Susan Jane Hamnett of the U.K. have approval to acquire 0.87 hectares at 70 School Road, Paihia, Northland for $1,900,000 from Klaus Becker and Regina Becker of Germany. The land adjoins land “held for conservation purposes” and includes “a historic place, historic area, wahi tapu, or wahi tapu area”. According to the OIO, “The Applicants are intending to establish a business in New Zealand and reside in New Zealand indefinitely. An application for a New Zealand Long Term Business Visa has been lodged with the New Zealand Immigration Service. The Applicants propose to acquire the subject property as a permanent residence. The Applicants are demonstrating a commitment to New Zealand through applying for and taking up New Zealand permanent residency.” [Decision number 200620075.] Summary statisticsAll investments These give provisional complete statistics for the year 2006. The gross and nett value of investment approved in 2006 is considerably higher than for 2005, though the number of approvals was a little lower. By far the greatest part of the value of the approvals is for sale from one overseas investor to another.
*In addition there was 1 retrospective approval granted during the month. This involved a gross consideration of $1,600,000 (and 155 hectares of land) and a net investment of $0 (and 0 hectares of land).
Investment involving land Gross and nett sales of freehold land and interests in land such as leases which were approved by the OIO during the two years have increased hugely in area. Refusals (above) are higher than last year, but only in tiny numbers: 3 in 2006 (involving only $2.25 million and 31 hectares) compared to 2 in 2005 ($1.59 million and 20 hectares).
*In addition there was 1 retrospective approval granted during the month. This involved a gross area of 155 hectares of land (and $1,600,000 consideration) and a net area of 0 hectares (and investment of $0).
Fishing Quota There was only one decision relating to fishing quota, but that was the first for several years.
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Compiled by: Campaign Against Foreign Control of Aotearoa, P. O. Box 2258 Christchurch. |
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