29 Jul DNZ Re-evaluates Position on Merger Proposal
DNZ Re-evaluates Position on Merger Proposal 29/07/2011
DNZ says it is re-evaluating its position on a proposed merger with Argosy after today’s ruling from Justice Asher that followed a hearing at the High Court in Auckland earlier this week.
Justice Asher decided against forcing Argosy to hold a special meeting ahead of next month’s scheduled Annual Meeting. DNZ had sought the meeting to require Argosy’s independent directors to take a more open and transparent assessment of all alternatives available to Argosy unitholders, including allowing more detailed information to be made available to allow alternatives such as the DNZ merger to be credibly evaluated.
In a written judgment Justice Asher declined DNZ’s application noting that the Manager’s discretion when to call a meeting must be assessed in light of obligations “to ensure that the trust is carried on in a proper and efficient manner”. The Court would only interfere where the exercise of that discretion is “capricious or irrational, or beyond the bounds of reason.”
Justice Asher’s decision also noted that DNZ could still move at the AGM to defer consideration of internalisation of the management rights and could put the existing proposed resolutions forward at the AGM and vigorously pursue its proposal there.
DNZ Chairman Tim Storey said the company was now considering whether or not it was worth continuing to pursue its merger alternative, particularly given the intransigence of Argosy’s independent directors and Trustee.
“DNZ maintains that the merger alternative is a one-off opportunity, with a number of the financial benefits that would potentially be eliminated or reduced if a merger took place after internalisation of the current Argosy management contract. Argosy unitholders would lose the opportunity to capture the 5 to 10% premium DNZ has offered because DNZ may not be in a position to offer this premium after the Argosy internalisation as the ability to access those benefits may have been lost.” said Mr Storey.
“The costs of continuing to pursue a merger given the lack of co-operation from Argosy, is another factor to be considered.”
Mr Storey said DNZ’s directors would take the time to consider the options available to the Company.
For Further Information Please Contact:
Tim Storey, Chairman, DNZ Property Fund Limited
Mobile: 021 633 089 – Email: firstname.lastname@example.org
DNZ Property Fund Overview
DNZ Property Fund Limited owns one of New Zealand’s largest diversified investment property portfolios with commercial office, retail and industrial properties located in the main urban areas throughout New Zealand.
As at 30 June 2011, DNZ Property Fund owned 50 properties with 285 tenants, a weighted average lease term (WALT) of 4.5 years, an occupancy rate of 98% over a net lettable area of 372,279m², and a portfolio value of $638m (31 March 2011 valuations).
DNZ Property Fund Limited is a Portfolio Investment Entity in which investors hold shares and is managed by its own internalised management team. DNZ Property Fund Limited also manages the property portfolio of Diversified NZ Property Fund Limited for Australian institutional investors.