Managers' price cut fails to impress

John Body, OnePath director, welcomed Argosy's price cut. Photo / Greg Bowker

A group of disgruntled institutional investors were not appeased after yesterday's backdown by the managers of Argosy Property Trust.

NZ Super Fund and ACC still want to remove ANZ's OnePath from the Argosy management contract, even after OnePath buckled and cut its asking price from $32.5 million to $20 million.

DNZ Property Fund, with $638 million of real estate, hopes to get a court date on Monday to sue Argosy's managers after failing to get a special meeting to discuss issues.

BT Fund's Matt Goodson said OnePath's price chop was "a step in the right direction" but he wants to see the Grant Samuel independent report on the deal, due out any day.

Paul Gregory, head of communications for the NZ Super Fund, remained unhappy.

"Our position has not changed. The proposal from the Super Fund is that the trustee is able to make a decision in favour of unitholders that they can remove the manager for nothing," Gregory said.

The Super Fund joined ACC and BT to push for a zero-dollar exit and they want a unitholder meeting to put the matter to a vote next month.

Nicholas Bagnall, ACC investment manager, was also still unappeased.

"We certainly welcome a reduction in the proposed golden handshake payment: $20 million is more realistic than the original price. However, it is still a high price to be paying to avoid the mild disruption associated with the trustee terminating the manager. Our current intention is to vote against this payment," he said.

"While we have not yet spoken to many other investors in Argosy, our expectation is that the $20 million payment is still too high to achieve the required 75 per cent unitholder support. If unitholders want to maximise the probability of getting rid of OnePath, they should vote in favour of our resolution, regardless of how they intend to vote in relation to the proposed $20 million payment."

But another institutional unitholder, Shane Solly, head of equities at Mint Asset Management, which has 3 per cent of Argosy, welcomed the price cut.

"The $20 million proposed transaction price for ANZ OnePath to sell the Argosy management rights back to unitholders appears to be a fair one. This is earnings and value-adding for unitholders. Internalisation will hopefully allow Argosy management to focus on improving returns to unitholders. Other components of governance will need to be reviewed."

Tim Storey, DNZ chairman, said OnePath's price chop did not address corporate governance issues.

John Body, OnePath director, welcomed Argosy's price cut and said the change reflected the views of key unitholders.