GLO pleased with response

Press, 4 March 1982, Page 21

GLO pleased with response

I PA Wellington I The Government Life j Office is considering using j the standing-in-the-market ; method of buying shares : again, after its success on i Tuesday when it acquired j D.I.C. specified preference i shares. j The assistant commis- ; sioner (investments), Mr : Frank Pearson, said he uni derstood that the Dunedin | brokers, Wilson,. Greenslade I and Co. had bought about i half of the 97,000 12 per cent i specified preference shares I the office had ordered. I The Government . Life ; Office is offering 160 c a j share- compared with 132 c ; for the last sale, for what j would give it a 3.5 per cent

stake in D.l.C.'s capital

It is believed to be the first time an institution has stood in the market, through a broker, for a specific order.

Mr Pearson said he thought the premium offered above last sale prices was quite high. “It means we have to give a bit to get the volume, but the method could well be worth it,” he said. An order could take much longer to fill through the more conventional means.

“Our first inclination is that the method has been well justified, by the response,” Mr Pearson continued. “The Life Office saw it as important to set some standards of disclosure. It

had been strongly against the anonymity factor of some previous dealings in the market.”

The office had stated its intentions, offered the premium, revealed who was making the offer and how much was required. The company had also pointed out to D.I.C. shareholders that a minimum of 100 shares was needed to qualify for the retailer’s 5 per cent discount. Only specified preference shares were being sought because shareholders qualified for tax-free dividends on ordinary shares, whereas special preference shares were taxable. The Life Office, however, paid tax on a different actuary basis.