Investors oust NPT directors

Shareholders vote down planned deal with giant property company

hareholders of property firm NPT have booted t wo of its directors from the board and voted down a deal with the $ 1.7 billion Kiwi Property Group.

To replace the ousted directors, investors yesterday also agreed to install the chair of NPT’s largest single shareholder, Augusta Capital, and two others to the NZX- listed minnow.

The result following a lively shareholder meeting in Auckland where investors voted on a proposal from the NPT board and Augusta’s rival plan.

The proposed NPT deal had three parts: For $ 230 million, NPT would buy Kiwi Property’s North City Shopping Centre in Porirua and its earthquake- strengthened Majestic Centre in Wellington’s CBD. That would more than double NPT’s size. Kiwi would take a 19.9 per cent stake in NPT via the issue of new shares. NPT would sell its management rights to Kiwi for $ 6m. Augusta, in its alternative plan, successfully proposed removing NPT directors and replacing them with its own appointees.

As a result of the vote, NPT chair Tony Sewell and director Jim Sherwin are leaving the company’s board.

They are being replaced by Allen Bollard and Bruce Cotterill, and Augusta chair Paul Duffy.

Carol Campbell maintains her position as an independent director.

The meeting included terse exchanges, with Sewell telling Augusta Capital’s founder and managing director Mark Francis to be quiet.

“Mr Francis, you’ve had your say,” said Sewell a number of times, silencing him completely at one point.

Francis spoke out strongly against the deal.

“This is a value destructive deal,” Francis told about 100 shareholders, accusing the NPT board and management of being “in distress”.

Augusta manages $ 1.7b of real estate in New Zealand and Australia and has been one of the best- performing real estate businesses.

Augusta i s NPT’s largest shareholder, with 18.85 per cent.

After winning the vote, Francis said in a statement to the NZX:

“The will of NPT’s shareholders has seen a poor proposal rejected and the governance changed; we are grateful for the support afforded to us by those shareholders.

“As outlined to NPT shareholders . . . our proposed next step will be to present a proposal to externalise the management to Augusta. We can run this company for a lot less . . .

“This will also introduce a much needed alignment of interests under a proven manager motivated to deliver greater returns for all NPT shareholders.”

Salt Funds Management holds 13.7 per cent of NPT and its managing director, Matt Goodson, also spoke out during the meeting, opposing the deal.

ANZ Investments, with 15.3 per cent of NPT and 8.9 per cent of Kiwi, was in favour of the deal.

Craig Tyson, its equity investments manager, made an impassioned plea for NPT shareholders to back it, saying it would give the business scale.

“The reality is, it’s a vehicle which has gone nowhere and been the worst performer in one, three, five, seven, 10 years. What do you do about it?

“The board are not out to do you in but to create value,” said Tyson.

“NPT i s too small so we have to make a decision about how to make it one of the best performers, not the worst.”