CCH still on lookout for international port partner

Christchurch City Holdings is still aiming to find an international partner for its majority-owned Lyttelton Port Co, despite its original plan being stymied by the failure of its full takeover bid.

Bob Lineham, chief executive of Christchurch City Holdings - the city council-owned infrastructure investment company - said the final shareholding was 74.06 per cent after the bid closed on April 12.

This was a long way short of the 90 per cent needed to compulsorily purchase the remaining shares and enable a plan splitting Lyttelton into two businesses to be run as joint ventures with Hong Kong infrastructure giant Hutchison Port Holdings.

Lineham said he intended taking a breather for the next few months while a new strategy was formulated.

"Although we do still think it'll be worthwhile pursuing an international partner for the port, we just have to work out how to do that," he said.

Asked whether possibilities could include Hutchison, Lineham said: "I can't really comment on that."

He said no talks were under way and the company did not intend launching another bid for Lyttelton.

Port of Otago's attempt to prompt its rival into co-operation by increasing its holding in Lyttelton to 15.3 per cent appeared to have at least bought it a seat at any future negotiation table.

"We will no doubt talk with Port of Otago in due course as part of our review of our strategy," Lineham said.

But, he added, "we do think the best potential in the initial round is to have an international partner".

Since Otago took its holding above 15 per cent there was more possibility of the two ports being viewed as associated persons under the Commerce Act and thereby lessening competition - a view that could impair Lyttelton's ability to make acquisitions.

As far as Lineham was concerned, Otago's exact holding made no odds.

Port Otago chairman John Gilks said he would like to talk to Christchurch City, but was in no hurry.

Other voices to be heard in any future deal included a group of Christchurch MPs who raised concerns about the outcome of selling the port's operational arm to the private sector.

The now-discarded plan to split the business in two had Hutchison taking 50.1 per cent of a new port operation company and Christchurch City Holdings and the council owning 50.1 per cent of Lyttelton Port Co.

Lineham said the plan addressed accounting structural issues.

"Clearly, there were some people that I think probably didn't appreciate the detail and formed a philosophical point of view," he said. "But we would take that into account in anything we came up with in the future."


Story so far

* Christchurch City Holdings made a full takeover bid on February 13, conditional on acquiring 90 per cent of all shares. It already owns 69 per cent.

* It wanted to secure 100 per cent, delist then on-sell a 49 per cent stake to Hong Kong giant Hutchison Port Holdings.

* On March 9, Port Otago bought a 10.1 per cent blocking stake.

* On March 29, Hutchison withdrew, leaving Christchurch City to try to complete the takeover on its own. It has increased its offer price 10c to $2.20.