DNZ offers new buyout deal for 'considerably' less than $43m

The board of the troubled $700 million DNZ Property Group has announced a second plan to buy out its managers but for less than $43 million.

Tim Storey, chairman, said a new deal for management internalisation of the business was proposed. A plan for that, and to list on NZX late last year, was ditched after an outcry from investors.

The management contract is owned by executive director Paul Duffy and Alastair Hasell, one of the founders of the business.

Storey said yesterday that DNZ, which remains indefinitely suspended on Unlisted, would pay the managers much less than previous valuations of $43 million from Northington Partners to more than $50 million from Deloitte.

But Storey said the price paid would be "considerably below the bottom end of both independent valuations and the price agreed with the manager in November last year".

DNZ's new board met yesterday for the first time and included new director David van Schaardenburg representing MMG Advisory Partners, whose clients have about $300 million invested with DNZ Property Group.

DNZ owns one of New Zealand's largest diversified investment property portfolios with commercial office, retail and industrial properties in Whangarei, Auckland, Tauranga, Hamilton, Rotorua, Palmerston North, Napier, Wellington, Nelson, Christchurch and Dunedin. It has 58 properties with 272 tenants, a weighted average lease term of 4.7 years, an occupancy rate of 95.6 per cent over a net lettable area of 397,696sq m, annualised income of $56 million with a portfolio value subject to final audit of $700.1 million.