Market Announcement – NPT Board review supports Kiwi Property Group Proposal

NZX Market Announcement

NPT Board review supports Kiwi Property Group Proposal

13 December 2016

NPT Limited (NZX: NPT) can now confirm that one of the proposals it has been considering regarding the future of NPT is from Kiwi Property Group (NZX: KPG), and that the Board currently intends to recommend this proposal to shareholders for voting at a Special Meeting in February 2017.

NPT Chairman, Sir John Anderson, said: “The NPT Board has undertaken a thorough review of four proposals received by the Company, including the Kiwi Property proposal and one from Augusta Capital (NZX: AUG).

“As well as our own review, we commissioned an independent assessment by specialist advisors, Northington Partners, and have consulted with major shareholders.

“The outcome is that we believe the Kiwi Property proposal is likely to deliver the best short and long term benefits to shareholders.

“We intend to recommend that shareholders vote in support of this proposal at a Special Meeting in February 2017,” he said.

Under its proposal, Kiwi Property would become a cornerstone shareholder in NPT via the sale of two properties for a combination of cash and scrip, and purchase the management rights for NPT’s property portfolio. The two properties are North City Shopping Centre, Porirua, and The Majestic Centre, Wellington Central.

It is proposed that NPT fund the transaction via a capital raising and bank debt.

Northington Partners assessed each of the four proposals with respect to the financial and strategic impacts on NPT, as well as considering a number of commercial factors.

Northington Partners concluded that, of the proposals reviewed, the Kiwi Property proposal “…will provide the current NPT shareholders with the best outcome from a financial, strategic and transaction certainty perspective.”

Northington Partners advised its conclusion reflects the following key elements:

  • The acquisition of properties from Kiwi Property is more consistent with NPT’s existing portfolio and strategy
  • The Kiwi Property proposal leads to an immediate and considerably higher level of earnings accretion
  • Kiwi Property will make a significantly higher payment for the externalisation of the management contract
  • Kiwi Property has proposed a more “investor friendly” management contract, with the ability to terminate without cause and the maintenance of an independent NPT Board, and
  • The Kiwi Property proposal provides NPT with the ability to leverage the Kiwi Property management resources to benefit the existing NPT portfolio.A summary of the comparative analysis will be provided to shareholders as part of the Notice of Meeting. A copy of the Kiwi Property proposal is attached to this announcement.

Tony Osborne
Chief Executive Officer
NPT Limited