Mystery bidder forced to up price
A mystery bidder who is trying to buy units in the Victoria Market Property fund for far less than what the manager thinks they are worth is slowly being forced to increase its offer price.
Friday, May 9th 2003, 2:52AM
An outfit called AC Nominees recently emerged seeking to buy units in the fund that owns the Victoria Market Property complex in Auckland for 35 cents each.
However, St Laurence Group, which took over managing the property over a year ago, reckons the units are worth about 70c each.
Following an on-going exchange of correspondence AC Nominees has bumped up its offer price. It has now gone from 35c to 47c per unit and has recently been increased to 57c cents.
When the AC Nominees offer first emerged St Laurence recommended that investors hold onto their units as it “believed that a higher price would be achieved by either waiting for the property to be sold and the fund liquidated,” or by selling your on the secondary market.
St Laurence were brought in to essentially rescue the fund after its value plummeted from around $14 million to about $6 million, or in unit terms the value had fallen from $1 each to about 17c.
Since taking over St Laurence have managed to sort out a number of problems, cut costs within the property and improve its income.
Now it is in the process of selling the property.
St Laurence Group managing director Kevin Podmore reckons once a deal has done investors could expect to get about 70c per unit.
“Bayleys, the marketing agents for the fund have reported strong buyer interest in the property despite the formal tender process having only just commenced, and have not revised down their initial price expectations.”
In the interests of looking after investors St Laurence have stepped into the picture and are offering to buy units at 60c each. In addition, it has undertaken to “pay investors 33% of any excess amount above 60c returned to investors following the sale of the property and liquidation of the fund.”
Podmore says the offer is being made to look after investors.
He says that the company isn’t going to get into a Dutch auction with AC Nominees.
Earlier story:
Earlier stories:Vultures target unitholders
St Laurence to the rescue
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