Gareth Morgan has unfortunately wounded a good story by denying persistent rumours that his eponymous investment business is on the block.
Tales have been swirling through the industry this week that Gareth Morgan Investments (GMI), which includes an individual portfolio management arm and the more famous KiwiSaver scheme, are close to sale with KiwiBank tipped as the most likely buyer for a putative price-tag of $50 million or thereabouts.
The logic for a GMI/KiwiBank hook-up is reasonably strong. Since divorcing as Mercer's distribution partner a couple of years ago, KiwiBank launched its own KiwiSaver scheme in 2010 with investment duties outsourced to AMP Capital. The KiwiBank scheme has now signed up about 15,000 members - testament to the strength of bank distribution but it needs a big boost to bring it up to the levels of its Australian-owned rivals.
The Morgan KiwiSaver scheme currently has an impressive 56,000 members but, according to my research, its growth rate eased back in the last financial year down to 14.7 per cent compared to 34.6 per cent in the previous period. Without a distribution network or acquisition further growth will be difficult.
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If Morgan was to sell it's hard to see him hocking off his KiwiSaver scheme to anyone but a New Zealand-owned firm. And what's more Kiwi than KiwiBank?
Stuart Bremner, KiwiBank head of wealth, fobbed me off with the standard corporate "we don't respond to market rumours" response, which is often code for 'yes, that's true' - but not always.
Morgan, however, was more forthcoming, issuing me with a firm denial and a counter-proposal to boot.
"The [sale] rumours are not right," he said. "In fact, we're looking at a little expansion deal with someone else."
Morgan wasn't keen to name names, claiming it might put the kaibosh on the yet-to-be-inked arrangement but there are a few KiwiSaver stragglers that might fit the bill: Brook Asset Management? Or maybe the remaining union schemes (remember Morgan picked up survivors when the union-based IRIS KiwiSaver scheme closed)?
This, of course, could be a classic diversion tactic. Other buyers are said to be eyeing up GMI.
Where there's smoke, there's mirrors.