November 2007 decisions

Yet another (overseas) owner for DCA (including Guardian Healthcare) 1

Pacific Equity Partners has approval to buy Hoyts. 2

Ex-NSW Premier and wife take shareholding in Blue Star Print’s parent company. 3

Lion Nathan buys land at East Tamaki for new headquarters. 4

Neil Construction of Malaysia buys 125 hectares in Kerikeri for subdivision. 5

Goodman Group acquires two leases on Manukau property. 5

Consortium buys 24,442 hectares of former Fletcher forests in Bay of Plenty. 6

Block at Closeburn Station sold to Australian investor 8

Summary statistics. 8

Yet another (overseas) owner for DCA (including Guardian Healthcare)

British United Provident Association Limited of the U.K. has approval to acquire DCA Agedcare Holdings Pty Limited, for a suppressed amount from DIAC Holdings NV, owned 57.55% in the U.S.A., 22.2% by “various overseas persons”, 15.2% in the U.K., 2.55% in Singapore, and 2.5% in Canada.

DCA was owned by private equity investor CVC Capital Partners, which bought it less than a year earlier, in December 2006 (see our commentary for that month for further details). In New Zealand, DCA is known as Guardian Healthcare. This is its fourth change of owner since 2004 (see our December 2006 for further details).

The purchase includes the following properties which are presumably the sites of facilities run by DCA: 16 hectares of freehold comprising:

·         4.4 hectares at 19 Liston Avenue, Taupo;

·         5.5 hectares at 921 Tararu Road, Thames, South Auckland;

·         1.4 hectares at 4 Observatory Close, Whitby and 18 Glen Road, Stokes Valley, Lower Hutt, Wellington;

·         0.9 hectares at 483 and 505 Aberdeen Road, Gisborne; and

·         3.4 hectares at 425-429 Te Ngae Road, Rotorua, Bay of Plenty.

According to the OIO,

BUPA will incorporate a wholly-owned special purpose Australian company to acquire the shares in DCA. DCA is the ultimate holding company of the aged care, retirement village and medical alarms business conducted by the DCA Group in Australia and New Zealand. The New Zealand businesses are known as the Guardian Healthcare Group and comprise a health services and facilities business, a retirement villages business and a home based services business including personal medical alarms and life care products.

British United Provident Association Limited (BUPA) is the successful bidder in a competitive sale process conducted by DIAC Holdings NV in respect of all the share capital in the Australian company, DCA. The BUPA Group has a clear strategy of pursuing growth in both the United Kingdom and international markets particularly in the Australian and New Zealand markets where the BUPA Group has identified opportunities for an experienced operator and provider of aged care businesses to make acquisitions and apply its international experience in the provision of aged care services. The acquisition will geographically diversify the BUPA Group’s international operations and provide a platform to further expand its aged care and retirement village portfolio.

According to its web site, BUPA is a provident association (and so does not have shareholders) but describes itself as “an international health and care company with bases on three continents and more than seven million customers” with operations in the U.K., Spain, Australia, Ireland, Hong Kong, Thailand, Malta and Saudi Arabia. Its biggest activity is health insurance, but is also involved in childcare facilities (including 44 nurseries in the U.K.) and residential care for the elderly, mentally ill and others needing specialist care. It says: “BUPA Care Homes is one of the largest providers of care homes for older people in the UK. We have over 300 homes around the country, caring for over 21,000 residents.” (See http://www.bupa.co.uk/about/html/what_we_do/index.html and http://www.bupacarehomes.co.uk/asp/whatbupaoffer/carehomes.asp, accessed 29 March 2008.)

[Decision number 200720062.]

Pacific Equity Partners has approval to buy Hoyts

Pacific Equity Partners Pty Limited on behalf of Pacific Equity Partners Fund III, Pacific Equity Partners Fund IV, International Capital Group plc and Hoyts Group management, owned 49.7672% in the U.S.A., 23.4316% in Australia, 11.5128% by “various overseas persons”, 6.7052% in the U.K., 2.9336% in the Netherlands, 1.864% in Singapore, 1.3776% in Sweden, 1.072% in Iceland, 0.8% in Denmark, and 0.536% in Japan, has approval to acquire up to 100% of Hoyts Corporation Holdings (NZ) Limited (owned in Australia, 50% by West Australian Newspapers Holdings Limited, and 50% by Publishing and Broadcasting Limited) for a suppressed amount.

Publishing and Broadcasting Ltd (PBL) is part of the huge Packer media empire in Australia. However James Packer is selling off many media assets in order to increase his ownership in gambling, such as casinos.

The acquisition includes 2.3 hectares of leasehold, presumably cinema sites, comprising:

·         1.2 hectares at Link Drive, Wairau Park, Glenfield, Auckland; and

·         1.1 hectares at 392 Moorhouse Avenue, Christchurch.

The OIO states:

Pacific Equity Partners Pty Limited (PEP) on behalf of funds managed and controlled by PEP proposes to incorporate a new Australian entity to acquire all of the issued units in The Hoyts Trading Trust (Hoyts Australia) and a new New Zealand entity to acquire the entire issued share capital of Hoyts Corporation Holdings (NZ) Limited (Hoyts NZ).

Hoyts NZ has five wholly-owned subsidiaries: Hoyts Cinemas (NZ) Limited, Hoyts Distribution (NZ) Limited, Val Morgan Cinema Advertising (NZ) Limited, Media Entertainment Group (New Zealand) Limited, and Administration and Developments Limited. Hoyts NZ’s businesses include cinema exhibition, cinema advertising and film distribution.

The Applicant proposes to acquire Hoyts because it provides an opportunity to acquire a well established business where the careful use of leverage in the capital structure, supported by a clear strategy for improving the business combine to provide an attractive investment.

Refusal of this application would likely adversely affect New Zealand’s image overseas as the shares proposed to be acquired represent a small part of a wider international transaction.

According to Wikipedia,

Hoyts Exhibition manages 450 screens across 40 Australian and 9 New Zealand cinema complexes; making it Australia’s second largest cinema chain. Val Morgan, the cinema advertising arm of the Hoyts group, dominates the cinema advertising market with over 95% market share. Finally, Hoyts Distribution is the largest independent film distributor in Australia; a business centred around the purchase of rights to, and subsequent management of, distributing independent films in Australia through theatrical, television and home entertainment channels. (http://en.wikipedia.org/wiki/Hoyts, accessed 29 March 2008.)

Val Morgan says it holds the advertising rights to virtually all advertising screens in Australia and almost all screens in New Zealand (including cinemas owned by Hoyts’ rivals) (http://www.valmorgan.co.nz/nz/about-us/history/ accessed 14 May 2007) – though in Australia it may be too modest: in 2001 it was reported that “Val Morgan now has a monopoly on selling advertising in Australian cinemas, following the announcement this week that parent company, Television & Media Services Limited (TMS), has acquired Media Entertainment Group (MEG).” (“Val Morgan acquires last competitor”, by Hudson Bawden, B&T Marketing & Media, 5 June 2001, http://www.bandt.com.au/articles/05/0c003b05.asp.)

[Decision number 200720066.]

Ex-NSW Premier and wife take shareholding in Blue Star Print’s parent company

Gabane Pty Limited, owned 100% in Australia by Nicholas Frank Greiner and Kathryn Therese Greiner, has approval to acquire “rights and interests in” up to 0.3% of the shares of Sirius NZ Holdco Limited for $500,000 from existing shareholders. Sirius NZ Holdco was owned 51.0484% in the U.S.A., 32.68% in Australia, 2.3216% in Singapore, 12.4% in Aotearoa by Thomas Wilton Sturgess, and 1.55% in Aotearoa.

Nicholas Frank Greiner is former Liberal Party Premier and Treasurer of New South Wales from 1988 to 1992. He is chairman of Blue Star Print Group, deputy chairman of CHAMP Private Equity, and chairman, deputy chairman or director of numerous other companies (http://www.nickgreiner.com.au/, accessed 29 March 2008).

Thomas Sturgess is Managing Director of the Blue Star Print Group.

The OIO states:

Consent was granted on 16 February 2007 for Sirius NZ Finance Co Limited (Sirius Finance) to acquire 100% of the shares in Blue Star Print Group Limited (Blue Star). This consent included the issue of shares in the Sirius Finance to Sirius NZ Holdco Limited (Sirius Holdco). The shares in Sirius Holdco were issued to Castle Harlan Australian Mezzanine Partners Pty Limited (CHAMP) as manager for the CHAMP Buyout II Trust and Castle Harlan, Inc. as manager for the CHI II Funds. Blue Star is a company that provides print and marketing communications solutions in New Zealand and Australia.

In order to fund further growth and acquisitions, Sirius Holdco proposes to issue ordinary shares to each of the existing shareholders and the Applicant.

Gabane Pty Limited (Gabane) is a company controlled by Nicholas Greiner, who is a current director of Blue Star and who is currently being appointed as a director of Sirius Holdco and the Vice Chairman of CHAMP’s Investment Committee. CHAMP and Castle Harlan Inc manage the CHAMP funds which currently hold approximately 86% of the ordinary shares in Sirius Holdco. It is proposed that Gabane will be issued with 500,000 ordinary shares in Sirius Holdco. Gabane will be considered to be an associate of CHAMP for the purposes of the Overseas Investment Act 2005.

For further details on this change in shareholding in the Blue Star Print Group and its ownership, see our commentary on the October 2007 decisions, when several other shareholding changes were approved.

[Decision number 200720068.]

Lion Nathan buys land at East Tamaki for new headquarters

Lion Nathan Limited, owned 46.13% in Japan by Kirin Brewery Company Limited, 49.24% in Australia, 0.14% by “persons who may be ‘overseas persons’”, and 4.49% in Aotearoa, has approval to acquire 17 hectares at 55 Ormiston Road, East Tamaki, Manukau City, Auckland for $62,003,576 from Harold Charles Francis Plumley of Aotearoa. The acquisition includes land which 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:

New Zealand Breweries Limited (NZB) has entered into an option to purchase the land as part of its project to find a more suitable industrial location to relocate its New Zealand brewing operation.

The Applicant intends to sell its current site and invest the proceeds in the construction of a new brewery on the relevant land. The land is situated in a more suitable industrial location than the current site, which is in a commercial and residential area.

The Applicant believes that the purchase of the land is necessary to ensure long term investment. In order to maintain its dominant position in the New Zealand beverages market, the Applicant must modernize and consolidate its manufacturing facilities. The relevant land would allow an integration of the manufacturing, warehousing, distribution and wholesaling arms of the Applicant’s business into a comprehensive unit operating from one location.

The OIO approved the sale of Lion Nathan’s current Newmarket site to AMP and Perpetual Trust for $172 million (in a deal to be completed in 2011) in September 2007 – see our commentary for that month for further details.

[Decision number 200720065.]

Neil Construction of Malaysia buys 125 hectares in Kerikeri for subdivision

Neil Construction Limited, owned by the Tiong Family of Malaysia, has approval to acquire 125 hectares at Kapiro Road, Kerikeri, Northland for $16,875,000 from Tubbs Farms Limited, owned 100% in Aotearoa by Sidney James Tubbs and Shirley Anne Marie Tubbs. The land “either alone or together with any associated land” adjoins land that is a road, that adjoins the sea or a lake.

According to the OIO,

The Applicant, which is part of The Neil Group of Companies, acquires land for residential subdivision, development and resale. The Applicant proposes to acquire the subject land to add it to the company’s portfolio of land for residential subdivision. The land is currently used by the vendor as a dairy farm. The Applicant proposes that the acquisition of the subject land will provide for comprehensive residential development of up to 200 residential/lifestyle sections. The development of the subject land is likely to be completed in five or six stages with the construction of the first stage expected to commence in late 2008.

 [Decision number 200720063.]

Goodman Group acquires two leases on Manukau property

In two similar decisions, Goodman Nominee (NZ) Limited and Goodman Nominee (NZ) No 2 Limited as nominee of the Goodman Property Trust and the Goodman Group, owned 48.9648% in Australia, 12.918% by “various overseas persons”, 5.6322% in Aotearoa by Goodman Holdings, and 32.485% in Aotearoa by minor shareholders, have approval to acquire leasehold properties at 60 Westney Road, Manukau, Auckland for suppressed amounts from Workstore Developments Limited, owned 50% in Aotearoa by Richard Balcombe-Langridge, Glenda Eveleen Balcombe-Langridge and Andrew Balcombe-Langridge as trustees of the Chiswick Trust, 25% in Aotearoa by Christopher Verissimo as trustee of the Christopher Verissimo Trust, and 25% in Aotearoa by Terrence John Scott as trustee of the Terrence John Scott Trust. The land “includes/adjoins land which is provided as a reserve, a public park, for recreation purposes, or a private open space”.

In both cases, the OIO states:

The Applicant has received consent to enter into options to lease all of or part of a 34 hectare property located at 60 Westney Road, Manukau, Auckland. The Applicant proposes to enter into a ground lease of the subject property (which forms part of the 34 hectare property) from Workstore Developments Limited (Workstore) for an initial term of 20 years. The ground lease will be perpetually renewable.

We have no information on the previous consent referred to. The application was made in the second half of 2004.

In one case, the leasehold is 2.1 hectares and according to the OIO,

The Applicant proposes to undertake a commercial property development on the subject land which will be sub-leased to DHL Exel Supply Chain (New Zealand) Limited to be utilised for warehouse and distribution facilities. The entry into a sub-lease which [sic] will facilitate the proposed development to be undertaken by the Applicant. [Decision number 200720060.]

In the other case, the leasehold is 1.3 hectares and according to the OIO,

The Applicant proposes to undertake a commercial property development on the subject land which will be sub-leased to Supply Chain Solutions (NZ) Limited and Pacific Network Global Logistics Limited to be utilised for warehouse and distribution facilities. The entry into a sub-lease will facilitate the proposed development to be undertaken by the Applicant. [Decision number 200720061.]

Consortium buys 24,442 hectares of former Fletcher forests in Bay of Plenty

GTI 8 New Zealand Limited has approval to acquire 24,442 hectares in “various forests in the Bay of Plenty region” for a suppressed amount from East Woodlands Limited, Northwest Woodlands Limited and South Woodlands Limited.

This appears to be part of the former Fletcher Challenge Forests forest estate which it sold to a consortium led by Kiwi Forests Group in 2004. See our commentary for February 2004 for further details.

The land includes “an interest in land which, either alone or together with any associated land of that type”

·         is or includes a historic place, historic area, wahi tapu, or wahi tapu area that is registered or for which there is an application or proposal for registration under the Historic Places Act 1993; and

·         adjoins a scientific, scenic, historic, or nature reserve under the Reserves Act 1977 that is administered by the Department of Conservation; and

·         adjoins land that includes a historic place, historic area, wahi tapu, or wahi tapu area that is registered or for which there is an application or proposal for registration under the Historic Places Act 1993; 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 “interest in land”, apart from freehold ownership, is probably referring to forestry rights which other companies have over the land but will eventually be returned. The OIO states that “The majority of the Forest Estate is subject to 8 registered forestry rights, 5 of which have been granted to Tiaki Plantations Company and 3 to OTPP New Zealand Forest Investments Limited.” Further information on this is below.

GTI 8 New Zealand Limited is owned 37.3% in the U.S.A., 18.7% by “various overseas persons”, 15.58% in Denmark, 7.39% in Canada, 6.38% in the U.K., 6.23% in Sweden, 0.93% in Germany, and 7.49% in Aotearoa.

East Woodlands Limited, Northwest Woodlands Limited and South Woodlands Limited are owned 46.262% in Canada by Ontario Teachers’ Pension Plan Board (OTPP), 7.7659% in the U.S.A. by Arkansas Public Employees Retirement System, 3.333% in the U.S.A. by Prudential Financial Inc, 5.1662% in Denmark by Laerernes Pension Forsikringsaktieselskab (Teacher’s Pension and Life Insurance Company Limited), 4.1329% in Denmark by Kommunernes Pensionsforsikring A/S (Municipal Pension Insurance Company Limited), and 33.34% in Aotearoa by Kiwi Forests Group Limited.

The OIO states:

GTI 8 New Zealand Limited (GTI 8), an indirect subsidiary of GTI 8 Investments Acquisition Company Limited, has entered into an agreement for sale and purchase to acquire various parcels of land (the Forest Estate) from East Woodlands Limited, Northwest Woodlands Limited and South Woodlands Limited.

The majority of the Forest Estate is subject to 8 registered forestry rights, 5 of which have been granted to Tiaki Plantations Company (Tiaki) and 3 to OTPP New Zealand Forest Investments Limited (OTPP). These forestry rights are for one rotation only and as the trees are harvested by Tiaki and OTPP over that part of the land and the land returned to GTI 8, the land will be replanted by GTI 8. Additionally, those parts of the land already returned to the vendor which have not been replanted will be replanted by GTI 8.

GTI 8 intends to be a long-term investor in the New Zealand forestry industry. GTI 8 intends to nurture, enhance and develop the forest estate as a sustainable, high performing business. GTI 8 believes that its acquisition will create strategic business opportunities which will expand and strengthen the Forest Estate and consequently the New Zealand forestry sector.

[Decision number 200720067.]

Block at Closeburn Station sold to Australian investor

Hecarvey Pty Limited as trustee of the Rolchim Family Trust of Australia has approval to acquire 0.5 hectares at Lot 12, Closeburn Station, Glenorchy Road, Queenstown, Otago and 37 hectares (a one-twenty-seventh interest in 1,003 hectares) at Lot 12, Closeburn Station, Glenorchy Road, Queenstown, Otago for $6,185,000 from Garry Noel Mahan and Sally Anne Mahan of Aotearoa.

The land “either alone or together with any associated land” adjoins a “scientific, scenic, historic, or nature reserve under the Reserves Act 1977 that is administered by the Department of Conservation… adjoins land held for conservation purposes under the Conservation Act 1987… [and] adjoins land that is a recreation reserve, that adjoins the sea or a lake.”

According to the OIO,

the Applicant proposes to acquire a lifestyle lot comprising 0.5020 square metres and a 1/27 interest in 1,002.678 hectares of farmland in the rural residential subdivision development of Closeburn Station. The directors and shareholders of the trustee of the Applicant, Mr and Mrs Hector, intend to use the lifestyle lot as a base from which other investments may be made in New Zealand. The farmland at Closeburn Station is farmed by Closeburn Station Management Limited, the shares of which are held by all of the Closeburn Station lot owners. The Applicant will acquire one share in Closeburn Station Management Limited under the purchase.

There have been numerous lots sold at Closeburn Station under similar arrangements where the purchasers make a contribution to the running of the Station, but not for some time. The last one was in April 2006, which was a resale of an earlier purchase. There was a reference to such blocks in April 2005, but the last sale directly from the developers was in May 2002. See our commentaries for those months for further details.

[Decision number 200720059.]

Summary statistics

All investments

Again although this was a relatively quiet month with only 10 decisions, both the gross and net values of investment approved in the year to November 2007 are considerably higher than for the previous November year. (The net value disregards sales from one overseas investor to another, and discounts part New Zealand ownership of the assets.) By far the greatest part of the value of the approvals is for sale from one overseas investor to another.

Investment involving land

Gross and net sales of land approved by the OIO during the years to November have fallen considerably in area. Refusals (above) have risen slightly in number and area, though not value, and are still a tiny proportion of the total.

Fishing Quota

As usual, there was no fishing quota approved for sale this month (or year).

Compiled by:

Campaign Against Foreign Control of Aotearoa,

P. O. Box 2258 

Christchurch.