Capital Properties' independent directors have recommended that shareholders reject AMP Property Portfolio's takeover offer after an independent adviser valued the company above AMP's offer price.
The independent adviser's report from Deloitte Corporate Finance also said the bid was "not fair" to shareholders because it was too low.
"We assess thefair market value of 100 per cent of the ordinary shares in Capital Properties to be in the range of $357.7 million to $418.1 million as at the present date," Deloittes said in the report released yesterday.
"This equates to a value of $1.48 to $1.73 a share. The mid-point of this range is $1.60."
But AMP's offer of $1.42 has valued the Wellington landlord at just $343.1 million.
Stephen Costley, AMP Property Portfolio general manager, said he was "incredulous" about the Deloitte's valuation.
"Capital is trading at $1.44 and the market doesn't believe it's worth any more than that," Costley said. "We are reviewing the statement but, at this time, we are committed to the price."
Tony Frankham, Capital chairman as well as chairman of the independent directors' committee, criticised AMP Property's offer, saying any shareholders who accepted before the reports were released yesterday had "acted irrationally".
AMP's bid for Capital Properties - the largest provider of office accommodation to the Government - is conditional on it gaining 50 per cent of the company, although it is ultimately seeking complete ownership.
The independent directors said Deloitte's valuation was "conservative" and recommended against shareholders accepting the offer.
Matters are now in the hands of Capital's 15,500 shareholders who have until November 9 to decide whether to accept the offer. Key to the outcome will be the decision of stakeholder Kiwi Income Property Trust with a 19.23 per cent slice of Capital. Capital had a market capitalisation of $348 million at the end of last month.
