Foreign investment in Aotearoa/New Zealand

Overseas Investment Office – May 2013 Decisions

Swiss Buy Controlling Stake In Ebos

The most significant approval this month was the sale of 40% of the Ebos Group Limited New Zealand Public (88.5%), Accident Compensation Corporation (7.2%) and Various overseas persons (4.3%) to the Zuellig Group Incorporated Zuellig family, Switzerland (100%). The asset value was stared at $657,999,000. The OIO states: “The Applicant intends to acquire up to 40% of the shares in Ebos Group Limited as part of the consideration for Ebos Group Limited’s acquisition of a subsidiary of The Zuellig Group Incorporated”.

That subsidiary was Symbion, Australia’s leading pharmaceutical wholesaler and distributor by revenue and a leading veterinary wholesaler. And Ebos’ growth strategy hasn’t stopped with Symbion. In June 2013, Ebos was named the preferred respondent in the Government-owned Health Benefits Ltd’s tender to run the public health supply chain for 20 district health boards. See our November 2005 commentary for details of Zuellig’s previous purchases here of pharmaceutical wholesaling and logistical operations.

Paul McBeth in the National Business Review reported details of this (29/5/13): “Privately-held Zuellig Group is likely to be a passive investor in Ebos Group as it takes a 40% stake in the local healthcare and veterinary products wholesaler as part of a $1.1 billion deal, Ebos Managing Director Mark Waller says. Hong Kong-based Zuellig will get $397 million in cash and take a $498 million cornerstone stake in Ebos as part of the sale of its Symbion pharmaceutical unit in Australia to the New Zealand company. Ebos will also take on net debt of $230 million, taking the total to $1.1 billion.

“Mr Waller told a media conference in Auckland the Hong Kong-based group has been ‘hugely supportive’ of the New Zealand firm and he anticipates Zuellig will be a ‘passive’ investor, with its two directors on the expanded board. ‘If we’ve got good ideas, they’ll back it’, Mr Waller said. ‘They’re not hands-on running things’. The Ebos stake gives Zuellig vertical integration in New Zealand, with its 30% stake in listed pharmacy retailer Pharmacybrands. Zuellig reaps $US12 billion a year sales from its healthcare, agri-business and agricultural equipment firms across the Asia-Pacific.

“Mr Waller said the Zuellig shareholding ‘will create other opportunities’ given its scale across Asia-Pacific, though this acquisition will need time to bed in. Zuellig’s investment has an escrow period where it cannot sell any shares until the end of September 2014 or the announcement of the 2014 annual result, and Mr Waller said he did not expect the group will lower its stake. The companies have a long-standing relationship dating back many years, including a 2007 deal where Ebos bought Zuellig’s PRNZ unit for $87 million. Ebos is raising $239 million and taking on new debt to fund the acquisition and its shares are in a trading halt while it holds a bookbuild for a $90 million placement to institutional investors at $8.50 a share. It will hold a $149 million 7 for 20 pro-rata renounceable entitlement offer to existing shareholders”.

Buffett Has An Appetite For Heinz

In another significant transaction, Hawk Acquisition Holding Corporation Berkshire Hathaway Inc (50%) and an investment fund affiliated with 3G Capital (50%) received approval for the acquisition of rights or interests in 100% of the issued share capital of HJ Heinz Company which owns or controls:

a freehold interest in approximately 11.3 hectares of land at 255 Shands Road, Hornby South, Christchurch; and
a freehold interest in approximately 61.5 hectares of land at 320 Shands Road, Hornby South, Christchurch; and
a leasehold interest in approximately 6.3 hectares of land at Elwood Road, Hastings; and
a leasehold interest in approximately 10.4 hectares of land at 430 Napier Road, Havelock North; and
a freehold interest in approximately 14.9 hectares of land at 1400 Tomoana Road, Hastings.

Approval was also received for an overseas investment in significant business assets, being the Applicant’s acquisition of property in New Zealand used in carrying on business in New Zealand for consideration exceeding $100m, that property being HJ Heinz Company (New Zealand) Limited. The vendor was the HJ Heinz Company, various overseas persons (92.5%) and Blackrock, Inc, United States of America (7.5%); asset value $687,530,000. The OIO states: “A subsidiary of the Applicant will merge into HJ Heinz Company. Following the merger, the HJ Heinz Company will be the surviving corporation. The owners of the Applicant consider that the investment represents a good investment opportunity with significant long-term growth prospects”.

Berkshire Hathaway is the primary investment vehicle for one of the world’s richest individuals Warren Buffett, or “the Oracle of Omaha”, and this deal is part of a larger $US23.3 billion deal. 3G Capital is a Brazilian private equity firm. Heinz owns a number of well known food brands here in Aotearoa including ETA, Praise and, in particular, Watties. According to the Wattie’s Website, James (Jim) Wattie and friend Harold Carr formed J Wattie Canneries Ltd in 1934 and in 1935 started supplying pulped fruit to be made into jam, which led in turn to the canning of peaches and pears. Post WWII, the company expanded into tomato sauce, spaghetti, baked beans and other canned and frozen goods. Goodman Fielder and Wattie Industries merged in 1987, and in 1992, HJ Heinz snapped up Wattie’s for $565 million.

Ben Berkowitz and Martinne Geller reported on the deal (15/2/13):

Warren Buffett’s Berkshire Hathaway and private equity firm 3G Capital will buy ketchup and baby food maker HJ Heinz Co for $US23.2 billion ($NZ27b) in cash, a deal that combines 3G’s ambitions in the food industry with Buffett’s hunt for growth. Including debt assumption, Heinz valued the transaction, which it called the largest in its industry’s history, at $US28b. Berkshire and 3G will pay $US72.50 per share, a 19% premium to the stock’s previous all-time high. Heinz shares actually rose slightly above the offer price, although Buffett cautioned he had no intention of raising his bid.

Analysts said the deal could be the first step in a broader wave of mergers for the food and beverage industry. ‘Maybe for the consumer staples group in general this may start some talk about consolidation. Even corporate entities are flush with cash, interest rates are low, it would seemingly make sense’, Edward Jones analyst Jack Russo said. Companies like General Mills and Campbell Soup – itself long seen as a potential Heinz merge partner – rose on the news.

Buffett Hunting Growth

The surprise purchase satisfies, at least in part, Buffett’s hunt for growth through acquisition. He was frustrated in 2012 by the collapse of at least two deals in excess of $US20b and said he might have to do a $US30b deal this year to help fuel Berkshire’s growth engine. In this case, Berkshire is putting up about $US12b to $US13b cash, Buffett told CNBC, leaving it ample room for another major transaction. Berkshire Hathaway already has a variety of food assets, including the Dairy Queen ice cream chain, chocolatier See’s Candies and the food distributor McLane. Buffett, famed for a love of cheeseburgers, joked he was well acquainted with Heinz’s products already and that this was ‘my kind of deal’.

It does represent an unusual teaming of Berkshire with private equity though; historically Buffett’s purchases have been outright his own. He and 3G founder Jorge Paulo Lemann have known each other for years, and Buffett said Lemann approached him with the Heinz idea in December 2012. One Berkshire investor said he had mixed feelings about the deal because of the limited growth prospects domestically. ‘We’re a little hesitant on the staple companies because they don’t have any leverage in the United States’, said Bill Smead, Chief Investment Officer of Smead Capital Management in Seattle. But at the same time, he said, Buffett was likely willing to accept a bond-like steady return even if it was not necessarily a ‘home run’.

3G Expands

For 3G, a little-known firm with Brazilian roots, the purchase is something of a natural complement to its investment in fast-food chain Burger King, which it acquired in late 2010 and in which it still holds a major stake. Lemann, a globe-trotting financier with Swiss roots, made his money in banking and gained notoriety for helping to pull together the deals that ultimately formed the beer brewing giant AB InBev.3G’s Alex Behring runs the fund out of New York. He appeared at a Pittsburgh news conference with Heinz management to discuss the deal – and to reassure anxious local crowds that the company will remain based there and will continue to support local philanthropy. But at the same time, Behring said it was too soon to talk about cost cuts at the company. Unlike Berkshire, which is a hands-off operator, 3G is known for aggressively controlling costs at its operations.

Pittsburgh Roots

Also to be determined is whether Chief Executive Officer Bill Johnson would stay on. Only the fifth Chairman in the company’s history, Johnson is widely credited with Heinz’s recent strong growth. ‘I am way too young to retire’, he told the news conference, adding that discussions had not yet started with 3G over the details of Heinz’s future management. The company, known for its iconic ketchup bottles and Heinz’ 57 sauces, as well as other brands including Ore-Ida frozen potatoes, has increased net sales for the last eight fiscal years in a row.

“Heinz said the transaction would be financed with cash from Berkshire and 3G, debt rollover and debt financing from JP Morgan and Wells Fargo. Buffett told CNBC that Berkshire and 3G would be equal equity partners. Heinz shares soared 19.9%, or $US12.06, to $US72.54 on the New York Stock Exchange. A week ago the stock hit an all-time high of $US61 a share, having risen almost 5% this year and nearly 12% since the beginning of 2012. The deal is also a potential boon for US Secretary of State John Kerry, whose wife Teresa is the widow of HJ Heinz Co. heir John Heinz. Kerry’s most recent financial disclosures from his time in the US Senate show a position in Heinz shares of more than $US1 million, although the precise size is unclear.

Centerview Partners and BofA Merrill Lynch were financial advisers to Heinz, with Davis Polk & Wardwell LLP the legal adviser. Moelis & Company was financial adviser to the Transaction Committee of Heinz’s Board and Wachtell, Lipton, Rosen & Katz served as its legal adviser. Lazard served as lead financial adviser. JP Morgan and Wells Fargo also served as financial advisers to the investment consortium. Kirkland & Ellis LLP was legal adviser to 3G Capital, and Munger, Tolles & Olson LLP was legal adviser to Berkshire Hathaway.

MYOB Expands

MYOB Finance NZ Limited United States public (56.4%), United Kingdom public (7%), Cayman Islands public (6%), Singapore public (5.5%) and various overseas public (25.1%) received approval for the acquisition of rights or interests in up to 100% of the shares of Media Transfer Services Limited, the consideration of which exceeds $100m. The consideration was $136,000,000; the vendors were Derek William Jones, Malcolm James MacDonald, Stephen Paul Agnew and the trustees of the Ricola Nichard Trust, the Langston Trust, and the Stephen and Lisa Agnew Family Trust New Zealand 100%. The OIO states: “The proposed acquisition of Media Transfer Services Limited is part of a larger transaction resulting in MYOB Finance NZ Limited acquiring control of the BankLink Group”.

MYOB is an accounting software provider to many small and medium sized businesses in Australia and New Zealand. Gareth Vaughan reports on the deal (14/5/13):

Australia’s MYOB is buying New Zealand firm and fellow accounting software provider Banklink for $NZ136 million from privately held Media Transfer Services Limited. MYOB, which is majority owned by private equity group Bain Capital, says the deal is subject to a number of conditions including regulatory and third party consents, but is expected to be completed in June.

In a statement released to the Australian Securities Exchange MYOB said having BankLink’s bank feeds available would be a distinct competitive advantage in developing MYOB’s cloud accounting strategy. ‘BankLink is a highly successful organisation’, MYOB said. ‘The BankLink Service is used by nearly 5,000 accounting practices, and more than 320,000 small businesses throughout New Zealand and Australia. Each month, it securely delivers in excess of 13 million customer transactions from more than 100 banks, credit unions, brokers and fund managers’. MYOB says it’ll fund the acquisition through $NZ75 million of senior bank debt, with the balance coming through shareholder equity.

‘Accounting is going through a period of rapid innovation’, MYOB CEO Tim Reed said. ‘Cloud solutions (products and services) are replacing desktop applications; bank feeds are a key component of a cloud solution, as they are used as source data for the accounts. The benefits of automatic bank feeds are huge; they significantly reduce the time it takes to do the books. If you are running a small business, it is essential to have accurate financials. BankLink has proprietary methods of supplying accurate, reliable and secure bank feeds that are more accurate and secure than others’. BankLink’s British-based European business isn’t included in the acquisition. To be renamed ‘Bankstream’ it’s being retained by BankLink director Derek Jones. BankLink was founded by Malcolm MacDonald, Jones and Steve Agnew in 1986. All three are still listed as shareholders of Media Transfer Services…” I suspect this deal has something to do with the meteoric rise of Kiwi-based Xero. See our September 2011 commentary for details of how MYOB became a US-controlled company.

James Cameron Expands His Wairarapa Empire

In two separate transactions, James Cameron of “Titanic” and “Avatar” fame has increased his land holdings in the Wairarapa. Firstly, T Base 2 Limited, James F Cameron, Canada (100%), received approval for the acquisition of a freehold interest in approximately 10.9 hectares of land at 240 Norfolk Road, Carterton. The vendor was Adrianus and Alexandrine Van der Tol New Zealand (100%); consideration was confidential. The OIO states:” James F Cameron and his family intend to reside indefinitely in New Zealand. In this application the Applicant has sought and been granted consent to acquire a working walnut orchard in Carterton known as ‘Pinnacle Grove’. The Applicant intends to continue to operate the land as a walnut orchard and utilise the vendors’ knowledge and expertise to establish walnut trees on Pounui Station (land already acquired by the Applicant)”.

In the second approval, he received approval for the acquisition of a freehold interest in approximately 10.1 hectares of land at Lot 25, Western Lake Road, Featherston. The vendor was Imae Limited, Ian Raymond Telfar, New Zealand (90%) and Maria Georgette Telfar, New Zealand (10%); consideration was also confidential. The OIO states:”… They are acquiring the land as part of a larger acquisition of land in South Wairarapa which they will use as a residence and working farm”. Caleb Harris (8/7/13) suggests Cameron’s vegan diet may be behind his Pinnacle Grove purchase:

James Cameron’s vegan diet is thought to be behind his recent decision to buy a walnut orchard in Carterton. The Hollywood director’s previous purchases around his family’s home in south Wairarapa have all been dairy farm land, and the Government requires that agricultural land bought by overseas investors must continue to be productive. But dairying sits uneasily with his and his family’s veganism, he told the New York Times in 2012. ‘So we’re looking for something more crop-based’. He has now found that in Pinnacle Grove, a walnut orchard that the Overseas Investment Office cleared him to buy last week.

In giving its consent, the OIO said that, as well as continuing to operate the orchard, Cameron, 58, planned to use the ‘knowledge and expertise’ of current owners Ad and Alma van der Tol to begin walnut production on Pounui Station, one of his earlier purchases. As well as shunning meat, fish, or poultry, vegans avoid all other animal products and by-products, such as eggs, dairy, honey and gelatine. In a speech to the National Geographic Society last month, Cameron said the human race was ‘sleepwalking off a cliff’ if it did not stop consuming animal products. ‘By changing what you eat, you will change the entire contract between the human species and the natural world’, he added.

Cameron’s walnuts feature strongly in Wellington on a Plate and are used by at least 16 Wellington and Wairarapa eateries, including Artisan, Logan Brown, Osteria del Toro, Cafe Polo, Pravda and Cafe Mirabelle. Glenys Almao, owner of Greytown’s Main Street Deli, said Pinnacle Grove walnuts stood out for their freshness, flavour and quality”. See our December 2011, February, April and August 2012 commentaries for details of Cameron’s earlier Wairarapa purchases.

Retirement Village Planned Next To Lower Hutt Golf Course

Summerset Group Holdings Limited, New Zealand Public (61.7%), Perpetual Trustee Company Limited, Australia (26.9%), QPE Co-investment Pty Limited, Australia (10.5%) and Summerset LTI Trustee Limited, New Zealand (0.9%), received approval for the acquisition of a freehold interest in approximately 3.3 hectares of land at Boulcott Street and Hathaway Avenue, Lower Hutt. The vendor was Boulcott’s Farm Heritage Golf Club (Incorporated) New Zealand (100%): consideration was kept confidential. The OIO states: “Summerset Group Holdings Limited intends to acquire the land to establish a retirement village”.

Nicholas Boyack reports on the deal in the Hutt News (16/4/13):

Plans for another huge retirement village in the Hutt have been confirmed with both being the biggest local construction projects since Queensgate. Last week, Summerset announced plans for a retirement village on 3.3 hectares of Boulcott’s Farm Heritage Golf Club land made surplus by the stopbank upgrade. It will coincide with further work planned for the golf club, including new clubrooms, practice facilities and a car park. Summerset Chief Executive Norah Barlow said it would be a ‘$100 million plus’ development and their second biggest in New Zealand. Ryman Healthcare is also pursuing a $100m-plus, 300-resident development on the old Petone College site.

Mrs Barlow said it was the first time Summerset had worked with a golf club and the central location and nearness to the hospital made it a special site. The company plans to consult widely with residents before applying for consent. Building will take about five years and when finished it will have a range of accommodation for 200 people, as well as a gym, cafe and easy access to the 18-hole golf course being redesigned around the new stopbank. There will also be a high-quality six-hole course suitable for the elderly.

Up to 50 staff will be employed on site and Mrs Barlow said the project would provide the city with a significant economic boost. ‘It will mean local jobs for local people… it is very positive news for the Hutt Valley… ‘. Mrs Barlow said there was no risk of over-supply of retirement villages and, as a quarter of the population would be over 65 in 20 years and with people living longer, the demand for aged care facilities would be hard to meet in Lower Hutt. Club Chairman Max Flowers said the golf club hoped to finish its $13m redevelopment in four years. ‘All things being equal we would like to think that by 2016 we will be in new our clubrooms and have everything pretty much done’.

When construction began on the stopbank, the club looked at seven options for the surplus land, including a sports hub. A sports hub looked positive but the club was unable to get the idea over the line. Mr Flowers has no doubt that having a retirement village next door will work well. The club has more than 1,000 members and he is expecting a high level of interest from people wanting to combine retirement with golf. ‘What we actually have here are two communities which have a common interest coming together’.

However while the golf club may be pleased with the prospect of new members, neighbours are clearly unimpressed with the size of the development. Nicholas Boyack again reports in the Hutt News (2/7/13):

Plans to use land formerly owned by Boulcott’s Farm Heritage Golf Club for a $100 million retirement village has teed up a fight with neighbours. Blueprints were unveiled at two meetings with local residents and the size of the buildings has taken many by surprise. Dennis Page was ‘stunned’ to see plans for a five-storey block opposite his Boulcott Street home. He has accused retirement home operator Summerset of lacking integrity in the way it has consulted residents.

‘The comments from your hired urban planning consultant that ‘under the Resource Management Act, we are not obliged to consult with you and can just go ahead and lodge our application’, is condescending, demeaning and insulting to residents, many of whom have been in this area for a long time’, Mr Page said in a submission. ‘Apart from being bullying, it implies that Summerset is not really genuine in talking with us (but is) undertaking a box-ticking exercise to try and placate the Council and create the illusion that you have consulted with all interested parties’. Mr Page believes the high density development, in a residential area neighbouring a golf course, is inappropriate.

Another neighbour, who does not want to be identified, says residents were surprised by the scale of the development and he is predicting a long fight. Most residents accept that a retirement village will go ahead but are surprised by its scale, he says. Golf club Manager John Freer says the land has been sold and he will not comment. Summerset Chief Executive Officer Norah Barlow acknowledges that some residents are concerned about the scale of the retirement village.

But she describes it as an ‘exciting’ development for Lower Hutt that will give the local economy a major boost. ‘It will bring much needed jobs, both during construction and when the village is up and running. During construction, more than 350 fulltime equivalent jobs a year will be created, a total estimate of 1,400 for the life of the construction programme through the employment of locally-based labour and contractors. ‘Once the village is operational, the local economy will benefit by a further estimated $2 million a year in employment’. The feedback has not all been negative. ‘We acknowledge some neighbours have concerns but we have also received a lot of interest and support from others’.

More than 200 people have already expressed interest in living in the village, three-quarters of whom are from Lower Hutt. The issue that concerns neighbours is the height, and Mrs Barlow says Summerset has tried to minimise the impact. ‘We’re making sure the higher buildings are away from the neighbouring residents and close to the school. We’ve designed those buildings to feed into the existing landscape and create green spaces that will soften the built environment’. Summerset is still developing its plans and will listen to the neighbours’ concerns, she says.

Features of the development include: A private plan change to get the land rezoned. Summerset will submit it in August 2013. A similar recent private land change for the old Mobil garage site took eight months to go through. There was no opposition to that application Construction is planned to begin mid- 2014. It will feature a five storey building and two four storey buildings opposite Boulcott School. Villas (one and two storey) are planned for the area that is currently used by the golf club for parking and its clubrooms. The entrance is at the end of Boulcott Street. There will also be an entrance off Military Road. When completed, it will house approximately 250 residents.

Residential Development Planned For South Auckland Golf Course

Fletcher Residential Limited, New Zealand Public (48.1%), Australian Public (20.9%), United States Public (18.5%) and Unknown Overseas Persons, Various (12.5%), received approval for the acquisition of a freehold interest in approximately 47.4 hectares of land at Great South Road, Takanini. The vendor was Manukau Golf Club Incorporated New Zealand (100%): consideration was kept confidential. The OIO states: “The Applicant intends to subdivide the land and create residential housing on the land”. Anne Gibson in the New Zealand Herald reports on the deal (24/1/13):

More than 700 members of one of Auckland’s best-known golf clubs are upping sticks and moving south. The Manukau Golf Club, off Great South Road near the Southern Motorway at Manurewa, is shifting 8km away to Alfriston-Ardmore Road near Ardmore Airport, after more than 80% voted to leave their 45ha site. Fletcher Residential is understood to be paying more than $40 million for the site, which could take 500 to 800 houses and is already zoned residential.

Men’s Club Captain Colin Tilley said the offer to buy the new site had been accepted and financial reasons prompted the move. ‘We, like many other clubs, were just managing to cover our operational costs, and then trying to service debt on top of that again was a bit over the top. There is a real buzz of excitement around the club now that the decision has been made’. The move is not due until September 2016 and General Manager Stewart Halligan said all-weather covered driving bays, short game practice facilities, a stand-alone function centre and multi-purpose clubhouse were planned. ‘It’s doing something for our members, who are the priority, but it is also doing something that supports golf. The traditional membership model is broken. We’ve got to have additional revenue streams and we must also establish a pipeline to build membership’, Mr Halligan said.

The new 6200m-long par 72 course on a 61ha site now used for potato production has been designed by Brett Thompson with consultant Phil Tataurangi. They did The Hills near Arrowtown and Christchurch’s Clearwater. Mr Tilley said members would continue playing on the existing course, which would be maintained to its present level, until they left. The club had considered staying at the site and looked at four or five other locations but the new area was projected to have 25% population growth in the next seven to ten years so was ideal. The new course would be Auckland’s best golfing facility, he said.

Fletcher Residential General Manager David Halsey said statements on the deal should come from the club, not him. Fletcher Residential is also building at Stonefields and Karaka Lakes. Conifer Grove Residents Association Chairman Jan van Wijk said people had enjoyed beautiful views across the greens for many years but this would all change once Fletcher moved in. Homeowners on Keywella Drive, Chippewa Place and Aristoy Close would be worst affected and concerns had been raised about traffic and congestion once the new places were built. ‘I don’t think everyone is thrilled about it but we can’t object to it. If it comes up for consultation, we’ll certainly make some noises, asking for decent quality housing’ Mr van Wijk understood a 600 residence low density development was planned”. See our February 2013 commentary for details of Fletchers’ last significant land purchase in Auckland.

Chinese To Build New Geothermal Power Station Near Taupo

Rainbow Holdings NZ Limited, Wanying He, China, People’s Republic of (100%), received approval to acquire a freehold interest in approximately 39 hectares of land located at Poihipi Road and Tukairangi Road, Taupo. Approval was also received for an overseas investment in significant business assets, being the Applicant’s establishment of a business in New Zealand where the total expenditure expected to be incurred in establishing that business exceeds $100m. The vendor was Fisher Finance Limited New Zealand (100%): consideration was stated at $6,000,000 for the land and development costs exceeding $100 million to complete the development of the geothermal power plant. The OIO states: “The Applicant intends to complete development of the power generating geothermal facility located on the land”. Contact Energy already operates a 200 GWH p.a. power station just down the road.

Tegel Sells And Leases Back A Number Of Properties

In two separate decisions, Tegel Foods Limited, Singapore Public (87.3%), Hong Kong Public (11.3%) and New Zealand Public and Various Entities, New Zealand (1.4%), has received approval to buy two properties as part of a larger property rationalisation. Firstly, approval was received for the acquisition of a leasehold interest in approximately 7.5 hectares of land, being the Drury Hatchery, Papakura, Auckland, and the New Plymouth Hatchery. Approval was also received for an overseas investment in significant business assets, being the Applicant’s acquisition of property in New Zealand used in carrying on business in New Zealand for consideration exceeding $100m, that property being the acquisition of leasehold estates in eight properties (including some sensitive land). The vendors were stated as unknown Freehold owners: consideration was stated at $100,000,000+.

The OIO states: “The Applicant currently owns a number of freehold properties. The Applicant intends to sell the Properties to a third party purchaser or purchasers and lease back the sites under a long-term lease for commercial reasons. The land will continue to be used for the Applicant’s current poultry business operations”. In a second decision, Tegel Foods received approval for the acquisition of a freehold interest in approximately 19.4 hectares of land located at the corner of Tramway and Boultons Roads, Darfield. The vendor was Robert John McGowan and Ann Margaret Shaw New Zealand (100%): consideration $545,000. The OIO states:” The Applicant is acquiring the land to replace its current processing facility land (located at Shands Road) which is being acquired by the Crown for a realignment of the Christchurch Southern Motorway”. See our February 2011 commentary for details of Tegel passing to Singaporean ownership.

No 1 Queen St Sold

Precinct Properties New Zealand Limited, New Zealand Public (73%), United Arab Emirates Public (19%) and various overseas persons (8%), received approval for the acquisition of property in New Zealand used in carrying on business in New Zealand for consideration exceeding $100m, that property being HBSC House situated at 1 Queen Street, Auckland. The vendor was No. 1 Queen Limited New Zealand (100%): consideration was $103,000,000. The OIO states: “The proposed investment will allow the Applicant to continue to build its portfolio of quality commercial office properties in New Zealand”.

Other May Decisions

Jonathan W Agnich Legacy Trust, Jonathan Welton Agnich, United States of America (100%), received approval for the acquisition of rights or interests in up to 50.4% of the voting shares of RobMiJon Holdings Limited which owns or controls:

a freehold interest in approximately 182.7 hectares of land at Masterton Castle Point Road, Masterton; and
a freehold interest in approximately 545.9 hectares of land at 176 Moeraki Road, Martinborough. The vendor was Richard J Agnich and Victoria T Agnich, United States of America (100%): consideration was $0.

The OIO states: “Richard and Victoria Agnich wish to gift 504 of the 1,000 voting shares (50.4%) in RobMiJon Holdings Limited to Jonathan Agnich as trustee of the Jonathan W Agnich Legacy Trust for estate planning purposes. This transaction is an internal restructuring of the shareholdings of a family owned company which has made several forestry related investments in New Zealand”. See our April 2010 and August 2011 commentaries for details of these previous approvals.

Michael Martin Crandall and Michele Ann Esposito, Michele Ann Esposito, United States of America (50%) and Michael Martin Crandall, United States of America (50%) received approval for the acquisition of a freehold interest in approximately 20.2 hectares of land at Lot 16, Mataka Station, Rangihoua Road, Kerikeri. The vendor was Auckland Road Family Trust, New Zealand (100%): consideration was $1,730,000. The OIO states:” The Applicants are acquiring the land for use as a holiday retreat. It is one of 30 lifestyle lots within the Mataka Development which was established on the Purerua Peninsula in 2002. The sale of individual lots provides capital for the communal farming and conservation programmes which are an integral part of the development”.

Bertelsmann SE & Co. KGaA and Pearson plc Bertelsmann Stiftung, Reinhard Mohn Stiftung and BVG-Stiftung, Germany (42.9%), United Kingdom Investors, United Kingdom (20.8%), various overseas persons (14.7%), United States Public (11.5%) and Mohn Family, Germany (10.1%), received approval for the direct or indirect acquisition of a freehold interest in approximately 0.7 hectares of land at 12-14 Poland Road, Wairau Valley, Auckland. The vendor was Random House New Zealand Limited Bertelsmann Stiftung, Reinhard Mohn Stiftung and BVG-Stiftung, Germany (80.9%) and Mohn Family, Germany (19.1%): asset value was $2,400,000. The OIO states: “The Applicants are merging their respective global consumer trade publishing businesses. The land will be transferred into the ownership of a new joint venture entity”.

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