Liam Dann: Time to get serious about disclosure issue

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Three days, three big stories and three serious disclosure issues for the NZX to consider.

On Wednesday, the Canada Pension Plan Investment Board surprised the market by putting out a media release about the pricing of its offer for Auckland Airport.

On Thursday Guinness Peat Group's shares were put on a trading halt by the NZX. But not until information about the $230 million fine Coats - GPG's biggest investment - has copped from the European Competition Commissioner began filtering in to the market.

It apparently didn't occur to GPG that the information was worthy of a special disclosure.

The EU ruling came out overnight New Zealand time, meaning those who knew what to look for were able to make a call on the stock while many were left in the dark. GPG shares fell 5c in morning trading before the halt was called.

Then, yesterday, SkyCity topped the lot with an outrageously lazy piece of corporate disclosure.

"Lazy" is kind compared to the furious and unprintable adjectives flying around the market yesterday afternoon.

News of a cash takeover offer at significant premium to the current price was delivered to the stock exchange at 10.02am - buried in a release with the heading "Profit Distribution Plan and Associated Disclosure".

Translated into plain English, it said something like this: "Gee, the All Blacks looked a bit rough this morning, still they came through with no injuries ... by the way, your house is on fire."

Okay, the first half of the release updated shareholders on the pricing of a buy-back option available to them. The second half dropped the bombshell.

SkyCity management is now saying it was forced to disclose the takeover interest because it was material to the profit distribution plan.

That's not going to impress brokers who were caught on the hop yesterday after only reading half the announcement.

In a perfect world, we'd always read every word of every announcement - but sometimes we rely on headlines.

And in the world of the share trader even a couple of minutes can make all the difference.

SkyCity shares had their biggest same-day rise yesterday - up almost 30 per cent at one point. By 10.10am the shares had leaped 10 per cent.

Imagine having to go back to clients and tell them you sold their stock immediately after the release announcement. There are certainly a few brokers who were caught out that way ... and they ain't happy.

What's frustrating is that it isn't that hard to put a stock on trading halt for a couple of hours to let the market catch up.

GPG also owed it to the many loyal small investors who can't be expected to monitor every bit of corporate news out of Europe. On the New Zealand market the NZX website is the first port of call.

The airport case is the least clear cut. There are some complex strategies being played out by several interested parties at present.

Brook Asset Management's Simon Botherway and a few other senior figures are also less than happy with the way the Canadian investment board handled its disclosure - no formal offer and pricing delivered by media release.

But the argument coming from the Canadian quarter is that they had picked up buying action by a potential rival and needed to get their price to the market quickly to ensure no one sold stock cheaply.

Infratil may or may not be still buying, it obviously hasn't added much to its 6.2 per cent stake because it now needs to disclose at every additional 1 per cent.

Just what Infratil's Lloyd Morrison is up to is the missing piece in the airport puzzle. Any suggestion that he was in bed with the Canadians seems to have been blown out of the water.

He's playing his cards close to his chest, but you can bet last year's New Zealand Herald Business Leader of the Year has some kind of grand plan.

* Liam Dann is editor of The Business Herald

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