By NZPA
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Tuesday 11th October 2005 |
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AMP has offered $1.42 a share for Capital Properties, but yesterday Capital's independent directors advised shareholders to reject the offer.
Their recommendation was partly based on a report by independent adviser Deloitte which valued the shares in a range of $1.48 and $1.73.
Shares in Capital Properties rose 3c today to just make it into the bottom end of the range, at $1.48.
General manager of APP Stephen Costley said Deloitte's valuation was based on inadequate analysis.
"Even at mid-point, Deloitte's valuation would make CNZ by far the most expensive property entity in the market, with by far the lowest rate of return at 6.9%," he said.
Costley cited commentary from Citigroup to back his view.
"Citigroup says that it is particularly surprised by the absence of any yield analysis in the report, and that it does not believe such analysis would support Deloitte's valuation," he said.
Costley said Deloitte's report sets up unrealistic expectations for shareholders
There was no mention of APP upping its offer, which opened on September 30 and will close on November 9.
APP owns 15.7% of Capital.
Capital Properties chairman Tony Frankham said yesterday the independent directors' committee unanimously decided the offer was not fair to shareholders. None of the directors would be selling their shares.
As part of the takeover process, Capital Properties revalued its mostly Wellington-based portfolio, leading to a jump in the value of its net tangible assets per share from $1.29 to $1.48. Its portfolio has grown 36% in value in the past 18 months.
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