Augusta Capital and its suitor, ASX-listed Centuria Capital, are at odds over why Augusta decided to defer the launch of its tourism fund until its 2021 financial year.
The launch was originally planned for next month.
Augusta managing director Mark Francis told BusinessDesk that the coronavirus crisis, which is impacting a number of tourism businesses, wasn't the reason for the deferral.
"The virus wasn't the driver. We are in market raising $90 million for our Augusta Property Fund at the moment and the tourism fund will follow that. At one point we did contemplate doing both funds contemporaneously but ultimately decided against that and hence the deferral of the tourism fund."
The Augusta Property Fund, which currently owns a "big box" shopping centre in Albany and a medical centre in Hamilton, was previously called Augusta Diversified Fund.
Centuria clearly has a different understanding: "Centuria understands the deferral is partly in response to the temporary impact of the coronavirus on the global tourism sector and Centuria views the deferral as both sensible and appropriate," that company told ASX.
Asked about Centuria's statement yesterday, Francis said he "can't really comment on their announcement, Jenny, but that's obviously their take on it.
"Like I said, for us it was about streamlining the launch of our two large offers. By delaying tourism a bit, it means we don't have to run them in tandem and also it means APF can underwrite and co-invest in the tourism fund (a key part of the investment mandate of the AP Fund)," he said.
"Like the NZ Super Fund, the Augusta Tourism Fund is a long-term investor in New Zealand's largest export industry and the short-term impact of a virus is certainly not a deterrent, if that is what you are asking."
The deferral came with an earnings warning: "Augusta now expects adjusted funds from operations for the year ending March 31, 2020 to be between $4.2m and $4.5m," Augusta said in a statement to NZX, which didn't provide a reason for the deferral.
Augusta reported $7.74m in adjusted funds from operations for the year ended March 2019.
Augusta said Centuria Capital had advised that the deferral of the tourism fund would not impact on the proposed takeover offer.
In late January, Augusta announced an in-principle agreement for Sydney-based Centuria to take over the New Zealand company in a cash-or-scrip offer valuing Augusta at $2 per share, or $180m.
When it released its first-half results in November, Augusta said it expected its results for the full year would be "materially similar" to the previous year, although that would depend on deal flow.
It repeated the November forecast on Jan. 29.
Centuria said yesterday that its offer won't close until beyond Augusta's financial year-end on March 31 and "the focus of Centuria's assessment of Augusta's ongoing potential has always been on Augusta's full-year 2021 performance and beyond.
"Assuming the offer is successful, Centuria is likely to receive the benefit of substantial property acquisition and other associated fees from the launch of the tourism fund, increasing the year one profit potential Centuria had originally modelled," the Australian company said.
"Accordingly, Centuria remains committed to its takeover offer for Augusta and Centuria and Augusta are working co-operatively to provide the takeover proposal to Augusta shareholders in accordance with the timetable set out in the bid implementation agreement."
The published agreement doesn't contain a definite timetable other than saying a formal offer should be dispatched to shareholders within six to eight weeks of Jan. 29 and Augusta planned to send shareholders its target company statement within 10 weeks of that date.
Augusta's directors have unanimously recommended the cash offer but have made no recommendation on whether investors should accept Centuria shares.
Francis and executive director Bryce Barnett, who collectively own 23.3 per cent of Augusta's shares, have agreed to accept Centuria's offer in shares and to a three-year employment contract at Centuria.
Augusta shares were 1.5 cents lower at $2.155 yesterday compared with $1.07 a year ago and $1.67 the day before the company announced the Centuria offer. Centuria shares were down 3 cents at A$2.67 ($2.78) compared with A$2.41 the day the offer was announced.
ASX-listed Centuria has a A$1.3 billion market capitalisation and Jason Huljich, son of New Zealand entrepreneur Chris Huljich, is its co-founder.