Forum Archive Index - May 2004

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

RPI stands for 'Rural Property Investments Limited'.    It is the vehicle 
that Baird McConnen and Craig Norgate are using for their partial 
takeover offer for Wrightsons, a company in which they want 50% 
control.

I have been furiously studying the prospectus to see if I am going to 
accept the offer for my WRI shares.  If the offer goes through, the good 
points as I see it are these:

1/ We gain the experience of both Baird McConnen and Craig Norgate 
on the board of Wrightsons.   Both of these men I believe will be great 
assets to the WRI board which, astonishingly, currently contains no-
one who has fought their way up through either the retailing or 
marketing industries.  Of course those who elect not to accept the offer 
and remain WRI shareholders will also gain from this.

2/ Holders of the RPI notes will get a preferential allocation of ordinary 
shares when RPI itself lists on the sharemarket, possibly in two or 
three years time.   Even better, the preferentially issued shares will be 
at a 5% discount to any public pool.

3/ If we get a sudden rise in inflation there is provision for the three 
and five year preference share interest rates, currently set at 9% and 
10.25% respectively, to rise according to a so called 'Reuters page 
FISSWAP' formula.  In theory your relative return is protected should 
interest rates rise dramatically.

4/ Noteholders get a more even distribution of income compared with 
the shares which give you a small interim payout and a much larger 
final payout.

5/ Noteholders return will not suffer if WRI is forced to start paying out 
dividends without imputation credits.    RPI has agreed to 'top up 
payments' so that preference shareholders would retain the same 
gross interest return.

6/ There may be some interesting arbitrage opportunities down the 
track if you continue to hold some shares while holding the notes 
(preference shares).   However, I would caution noteholders that the 
market for notes has traditionally not been a liquid as the market for 
shares.

7/ If WRI shares continue to perform well, there is a commitment to a 
small ( 4c to 8c per preference share) extra capital payout (which 
unfortunately looks like being taxable) when the preference share 
matures.

SNOOPY





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