City Realties prepares for merger

Press, 16 January 1986, Page 22

City Realties prepares for merger

PA Wellington City Realties, Ltd, directors were given a testing time yesterday before an extraordinary general of shareholders cleared the ground for the proposed merger with National Insurance.

The meeting approved, with some dissension, a change of name for City Realties to National Pacific Corporation, Ltd, subject to the takeover offer for National Insurance being declared unconditional. In other resolutions, shareholders approved changes to the City Realties memorandum of association, removing restrictions on mining, banking and insurance activities. The maximum number of directors permitted was increased from seven to eight, and a provision was deleted which had entitled National Insurance to appoint a director to the City Realties board.

This provision was not appropriate if National Insurance became a subsidiary of City Realties, the meeting was told. The change of name will apply only when the proposed merger is successfully completed. The changes were not accepted by shareholders unanimously. One shareholder in par-

ticular told directors the» merger was an unwise move, as it would take a property company into the more competitive — and less rewarding for shareholders — area of insurance.

The shareholder asked whether the merger was in the interests of all City Realties shareholders, and not just in the interests of National Insurance and McConnell Dowell shareholders, and a few City” Realties shareholders.

He also asked whether all, directors were in favour of the merger, and was critical of the absence of some directors at yesterday’s meeting. ‘lt’s almost an affront these gentlemen have not turned up to face shareholders,” he said.

The Chairman of City Realties, Mr Selwyn Cush- ‘ ing, rejected these remarks, saying the board was unanimous that the merger was in the interests of City Realties shareholders.

Mr Cushing said part of City Realties would remain a property company, but the company over all would gain from access to <■ National Insurance’s fee in- ' come of $l6O million to $l7O - million.

The merger would mean increased dividends, and increased profits, he said.