Chase chief listened to internet experts

By KARYN SCHERER


Force Corporation chairman Peter Francis admitted yesterday he had been unsure at first whether investing in the internet was the right move.

But one of the key players behind 1980s property developer Chase Corporation said he had been convinced by the "experts" that he was doing the right thing.

"I ask the question myself a million times. We took a lot of independent advice from outsiders in the industry ... Whether you like it or not, the internet is here to stay, and the potential for the areas of growth it's got are just enormous."

As part of the merger, Force plans to shed its property investments.

Mr Francis said it expected to complete the sale of the Force Entertainment Centre in central Auckland to Australian property trust MTM in about a month.

He confirmed it was unlikely to make any profit out of the deal, because of delays and cost over-runs on the project.

He also confirmed it planned to sell its Mt Wellington retail centre which it owns in conjunction with Harvey Norman, possibly through strata title.

However, it wanted to keep its cinema investments in New Zealand, Fiji and Argentina, and its stake in film production company South Pacific Pictures.

Mr Francis said Force was keen to encourage ihug's ambitious plans for growth.

"I think the company has grown so fast that we will try and give them a bit more administration-type management and assist them in that, but we certainly don't want to put the reins on them. We want to let them go."

However, he said it was up to Force shareholders to make up their own minds about the deal.

"That was what our concern was - to give shareholders the opportunity to make their own mind up on it. If they don't like it, I'm sure they will sell."

The deal comes as Force and its joint venture partner Village Roadshow are negotiating with the Commerce Commission to merge with their main rival in New Zealand, cinema operator Hoyts.

Between them, the three companies are estimated to control more than two-thirds of all box office sales in New Zealand.

The commission has indicated it will challenge the merger in court - a move that is supported by independent exhibitors and distributors.

Mr Francis said he did not expect the ihug deal to affect the merger plans, which were still "miles away" from going to court.

However, he confirmed ihug hoped to capitalise on Force's relationship with the movie studios.

"We have a relationship with the studios whether you like or not. It's not a prerequisite of the deal, but it's certainly something we'll work on if they want movies in the future."

Meanwhile, Disney-linked investment company Shamrock Holdings may also seek a seat on the board of the new company.

The American-based investment company, which made headlines with its unsuccessful foray into Brierley Investments in 1998, paid 62c a share for a 15 per cent stake in Force just over six months ago. Based on the company's closing price last night of 85c, it has already made a paper profit of around 40 per cent.

Mr Francis said Shamrock was happy about the deal.

"I can't see them having a problem with it and they have a lot of connections internationally."