Rural Trust holders wooed

By Chris Hutching

Friday 25th June 2004

St Laurence has upped its takeover offer for Rural Equities to 10c higher than a rival bid from H&G and is urging other shareholders to vote against the H&G purchase at the upcoming postal vote closing on July 8.

H&G has indicated it may have the numbers to achieve its target of 50.1% but its acquisition is still dependent on shareholder approval.

St Laurence managing director Kevin Podmore was coy about why St Laurence was aiming at just 19.9% of Rural Equities. It is understood St Laurence has over 10% of the shares.

The prize of the takeover battle is the management contract that Rural Equities holds for the New Zealand Rural Property Trust, valued at $103 million with 30 rural properties and a 856ha forest at Ngaruawahia. The trust's units have always traded significantly below net tangible asset backing. It also holds 31.9% of the New Zealand Rural Property Trust.

Podmore has raised once again the oft-heard prospect of listing the trust on the Stock Exchange to improve liquidity, which may close the NTA-price gap and offer unit holders an exit.

Meanwhile, St Laurence is offering a more generous exit offer than H&G, a company associated with Sir Selwyn Cushing, which owns 25.3% in Rural Equities while associates of the Cushing family own another 9.3%. The company recently announced it had acceptances for the 50.1% it seeks.

The strongest appeal of the St Laurence position (to reject the H&G proposal) may be with shareholders who feel they may be unable to sell all their shares to either bidder and will be left with residual holdings and even less influence than before. Similarly shareholders who want to keep their shareholding may prefer a more even balance of power at board level and on the share register. The St Laurence offer closes on July 2.

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