Dominion's Tri-City offer allowed to proceed
Tuesday, December 23rd 2003, 7:35AM
Tri City was established in 1999 by Farmers Mutual Group (FMG) to own a number of supermarkets throughout New Zealand which have Big Fresh/Woolworths as the anchor tenant.
FMG recently sold its 58% stake in the syndicate to Dominion after the units were put on the market through Bayleys, and now Dominion is making an offer for the units it didn’t own. However it stuffed up the offer saying it was going to pay bondholders an additional $475 in accrued interest when it meant a quarter of that - $118.75.
The Takeovers Panel says it wasn't satisfied that the offer complied with the takeovers code because it has mistakenly mixed up some numbers.
"The panel does not consider that it would be in the interests of Tri-City security holders for Dominion Retail's offer to be withdrawn and started again."
That's lucky for Dominion as it would have cost it $800.000 more than expected, and the fund's manager said before the Takeovers Panel meeting on the matter that it would like the offer withdrawn and restated in its original terms.
Rather the panel has opted for the offer's terms to be clarified and the offer extended to January 30 (as opposed to December 31).
Generously the panel has told Dominion that all security holders who accepted the offer should be given the opportunity to revoke their acceptances.
The offer is understood to be pretty close to the net asset backing of the fund based on the last valuation of its three properties - Woolworths supermarkets in Mt Wellington, Napier and Tauranga.
The fund is run by Nelson-based Investment Services, a company run by former Farmers Mutual Group chief executive Michael Millar.
Currently it is having an independent report done on the fairness of the offer.
Tri-City has paid its 384 investors (excluding FMG) an annual yield of 9.5%.
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