Offer for N.Z. Land criticised

Press, 2 March 1981, Page 20

Offer for N.Z. Land criticised

The ta.ke-B.ver bid for New Zealand Land ''scurities has been : crkiUsed by Mr S. J. White; the.TSecretary Of' the newly forfhed New Zealand share and debenture holders' co-operative. Mr White, an Auckland chartered accountant, has f nt a lett ' to the shareholders of N.Z. Land Securities, in which h- argues ' that the bid seems too IoW, 1 and that shareholders ate 1 not given sufficient information to enable them to de-1 cide on the fairness of the ' offer, g; j The text of the letter reads.— ■■’ 1 ..“My reaction on learning i of th®* proposed take-over I bffer of 25c for each share in N.&L.S.was to write to i the secretary of the- com- 1 pany, a copy of Which is below. As you will see on I the information available to > shareholders from the last i balance sheet, the asset backing for each share was i almost double the amount of' •the offer from. two executives of. the company and attothef, and. we are talking

• . ■ ' . ,-i - A’ . ■■■: < .r. ; 7>-:--7 a~~dt an additional $£00,090. Since then (hi s baard of the company. • has 7 recommended the offef, -. andVothef: figures have been; published,.namely <7, Valuation figure Of: 518 c, and;the'-half-year ? s profit of about $30,000.7 “Details of x the valuation v.".rth’ 17: ywjll be given to us by . .e company on February 26. of this With the-26C on the balance sheet, excluding the item? mentioned In point number :1 below, will, obviously 'need to,,.be explained;‘However; the .fact that the’ offer ex» coed* the valuation by seven cents hardly inspires fidence in either -factor,: It share market prices . have been used for the Valuation, this Is not acceptable' even as a guide in the N.Z.L.S. circumstances. The rules for selling a business arc the same as for selling any other possession, and the giving or receiving.'®! charity are not to my knowledge amongst them. A proper valuation Is the only just course. “We have a good example here .. .of insufficient infor-

..mation on which to h-*a a s decision, and shareholders • Should train themselves to apply their governing day to ' day principles to business » matters. ...--■.■7”‘'-’7 .„. f “The action of the two full-time executives of the| 1 companj’ who are parties toj ’ the take-over might be look-, • ed at questionably. They are! ’ fully aware of the matters 1 itemised.. belOW; now having ’ galnied. valuable personal experience end enjoyed securI Ity of employment and reI Ward, regardless Of the mil- • fortunes of shareholder®, 1 they want td US® their ®X’ • perience for their own ad--1 vancement, without on. th® > surface much thought for 1 those who made It possible. IWe should not deny their > wi&h, but W6 . Should ensure 1 they pay a fair price for| : anything they take with! ' them. > 7 ‘‘Let US - reject the offer ’ Without a detailed valuation sas unbusinesslike. If the ■ directors will not arrange a ‘ valuation we might invoke the companies Act if thCte i are enough Of us thinking aS -1 do. (Signed S. J. White).”