UDC veto ‘good for investors’
ANZ should float UDC Finance on the sharemarket after a Chinese conglomerate’s bid to buy the finance company was rejected, the Shareholders’ Association says.
The Overseas Investment Office (OIO) rejected HNA Group’s bid to buy UDC because it could not determine who the ‘‘relevant overseas person’’ intending to make the purchase was from the information provided.
New Zealand Shareholders’ Association (NZSA) chief executive Michael Midgley said the deal was ‘‘messy, untidy and unfortunate’’ but ANZ had dodged a bullet.
‘‘It could turn out to be a good thing for New Zealand and investors rather than having this company disappear off into the hands of someone we don’t really know about,’’ Midgley said.
‘‘Here is a perfect opportunity for ANZ to float the company on the New Zealand sharemarket. It looks like a no-brainer … it would be good for ANZ, good for New Zealand investors and shareholders and good for transparencyrather than disappearing into virtually unknown hands.’’
ANZ would not comment. Siah Hwee Ang, the BNZ chair in business in Asia at Victoria University, said the OIO’s decision could strengthen New Zealand’s foreign relations with China as its government has been tracking the conglomerate’s every move for its expensive foreign acquisitions.
ANZ announced plans to sell UDC to HNA for $660 million in January.
Midgley, who attended an investor meeting where the bid from HNA was announced, said investors raised questions about the sale but at the time it seemed clear.
"Here is a perfect opportunity for ANZ to float the company on the New Zealand sharemarket." Michael Midgley Shareholders' Association
HNA started out as an airline company that owned Hainan Airlines, a profitable airline, but in the past decade it had rapidly expanded and garnered a huge debt, Ang said.
‘‘Their rise in the international arena has been very fast … It’s almost come out of nowhere.’’
Bloomberg reported that HNA had assets worth US$150 billion
(NZ$213 billion). International banks including Bank of America Merril Lynch and Goldman Sachs have stopped doing business with HNA this year, and earlier this month Deutsche Bank was investigating whether HNA accurately reported its holdings when building its stake in the German bank.
In November a Swiss regulator ruled that HNA gave false information in its takeover of Zurichbased Gategroup.
In 2016, HNA paid A$393 million
(NZ$431m) for a 19 per cent stake in Virgin Australia.
Earlier this year it spent another A$400m buying a refrigerated logistics business from ASXlisted car dealership Automotive Holdings Group.
There is doubt about who HNA’s owners are, with some speculating that senior Chinese government officials and their families are ultimately large hidden shareholders.