DNZ float scuppered
DNZ has given into strong criticism and decided to can its $140 million initial public offering - for now.
Thursday, December 3rd 2009, 10:38PM 
10 Comments
The company announced last night that it has deferred the sharemarket float until next year
It says the debate in the media over the IPO "has resulted in confusion and concern amongst some of our shareholders."
A key point of contention is DNZ plans to use $43 million of the float proceeds to buy the management contract from chief executive Paul Duffy and former chairman Alastair Hasell.
The board say "it has a duty to take time to clarify matters for shareholders and correct any misconceptions. It is not appropriate to continue to debate the merits of these transactions in the media. It is damaging to the Company and to its future prospects. It also has the potential to undermine the relationship between the board and the shareholders."
While the IPO has been postponed the board say, in a statement, that they "unanimously support the proposed capital raising and listing and firmly believe this is in the best interests of the company and its shareholders."
While groups like MMG and individual shareholders have been vocal in their opposition to the structure of the IPO the board claims it has "received overwhelming positive support from the...capital market."
DNZ says the postponement will give stakeholders "time to properly reflect on the board composition and the current proposal."
It intends to explain other possible options and why they believe they are inappropriate for the long term future of the company.
"In the interim we will continue to manage the challenges the company faces in today's difficult environment and will re-establish the unlisted trading market which last traded the Company's shares at $0.40 (or post consolidation $1.00)."
All applications monies received to date will be refunded.
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Comments from our readers
MMG commends DNZ’s decision to withdraw their IPO proposal. We agree with their view that there is a need to engage further with DNZ shareholders and stakeholders. MMG is currently in active and constructive dialogue with them in this regard. MMG will continue working towards achieving quality outcomes for our clients who are existing DNZ investors.
MMG will issue further statements once these discussions with DNZ are progressed.
(This is a statement issued by MMG Marketing and Communications Manager Shaun Anastasi)
It is true that NZ Funds, as MMG's primary investment partner, has assisted them in resisting DNZ's capital proposals. However your logic comes unstuck at that point. If we wanted the money to flow to NZ Funds we would have supported the listing - as it would have provided investors the ability to realise their holdings. We believe that the terms of the proposed transactions would be detrimental to existing shareholders and unfairly favour the manager of DNZ. Trying to address that imbalance is all we are doing.
An overwhelming majority of existing DNZ investors have now signed resolutions supporting our efforts to bring about governance changes at DNZ.
They are very aware of who is working on their behalf (and who is not).
Richard (NZ Funds CEO/MMG Director)
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Sure buying a share for $0.82 with the real value of$2.10 is positive for new buyers , not so for current shareholders, and the paying $43Mill to these greedy directors , disgusting they should be sacked