Nat. Pac. merger imminent

Press, 4 November 1986, Page 22

Nat. Pac. merger imminent

PA Dunedin National Pacific Corp., Ltd, is at an advanced stage of negotiating a merger with an Australian insurer and an announcement is imminent, the company chairman, Mr Malcolm McConnell, said yesterday. This was only one development of a number by which the newly merged National Insurance and City Realties are demonstrating a bustling new pace, he told the annual meeting. Mr McConnell also said the new group was launching a unit trust called the Sharemarket Trust, which it was hoped would be the first of a stable. And the Trustees Executors and Agency Company was setting up a specialist farm consultancy unit which will offer consultancy services to farmers and rural sector financiers. Mr McConnell would not elaborate on the insurance merger deal but mentioned it in the context of a report commissioned from Booz, Allen and Hamilton, the international management consultants. “It is a report which

has given us the extra information we required to plan National Pacific’s growth path,” he said. “Right now, the financial services industry is probably the major growth sector of the New Zealand economy and National Pacific is ideally placed to take an impressive share of this growth market” Mr McConnell said it was intended the group should be more than the sum of its parts. An example of this was the acquisition of a 50 per cent interest in Renouf Partners two months ago. “It is a relationship which offers us extra strength and support and at the same time fills one or two of the gaps in our operation.” The intention is to make National Pacific a broadly-based financial services and investment group. A second example of the growth plan is the refloating of City Realties as a listed property company. It was absorbed by National Pacific during the merger with National Insurance and ceased to be a listed company. It will reappear 78.4 per cent owned by the parent company, but will be one of the largest property investment companies in the country, Mr McConnell said. It will have a capital

base of more than $76 million and only $1 million of debt financing. City Realties will be looking beyond New Zealand for investment. The United States was an area mentioned. Mr McConnell said the growth being sought is already well under way. One measurement is the share price. He calculated that an investment of $lOOO in . September, 1985, is now worth $l7OO, after including the 1 for 8 bonus issue. But a Dunedin sharebroker, Mr H. Robert Wilson, said this was a modest calculation. If the 1 for 16 issue of City Realties- shares was considered at the $1 price at which they are being offered to the public, the $lOOO investment was now worth $2250.