Capital Properties set to be delisted in AMP takeover

The $539 million listed landlord Capital Properties will be delisted if AMP pushes through its full takeover cash offer that will create a $1.1 billion real estate entity.
AMP Property Portfolio general manager Stephen Costley said he had no plans to keep Capital listed because it would soon have only one owner.

He expects Capital to be controlled by AMP within a few weeks and said it would then lack two key components for NZX listing: a broad investor base and liquidity.

Issues over the struggle for control of Capital came a step closer to being resolved with the surprise offer by the $591 million unlisted AMP Property Portfolio. It already controls a cornerstone 15.7 per cent stake in Capital, headed by Chris Gudgeon.

This year Capital became a battleground between AMP and the $1.2 billion listed Kiwi Income Property Trust, which late last year bought 19.9 per cent of Capital without declaring its hand.

Capital put its management rights up for sale but later withdrew them.

In March, AMP surprised the market by buying an initial 10 per cent stake then gradually increased its stake.

By Wednesday, Capital was trading at $1.32. AMP is offering well above the market at $1.42 cash.

With 237.8 million shares on issue, AMP's $1.42 offer values Capital at $337 million, close to its market capitalisation. Although Capital owns $539 million of property, it has $176 million debt and $77 million of debt securities in the form of capital notes on issue. AMP is not offering to take over the notes.

Capital requested a trading halt, pending a notice at 1pm that said it had appointed directors James Ogden, Michael Cashin, Peter Coote and Tony Frankham to advise on the offer. Capital will soon appoint an independent adviser to prepare a report on the merits of the offer.

Costley urged Kiwi to take up the offer, saying it would make a good profit on the shares it bought in November, calculating a $12.5 million windfall.

But Angus McNaughton, chief executive of Kiwi's manager, said: "We're happy with our acquisition which we paid $1.15 a share for last year and we'll be waiting to see what the full offer says and what Capital's independent directors recommend." Kiwi's board would then decide.

Costley said the full offer document would go out to shareholders within the next fortnight.