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Salt Funds sours further on NPT's deal

NZ Newswire logoNZ Newswire 4/04/2017 Paul McBeth

Salt Funds Management is even darker on property investor NPT's proposed tie-up with the much larger Kiwi Property Group, releasing a second salvo that labels the deal an "unacceptable transfer of value".

NPT shareholders will this month vote on a deal to buy two buildings from Kiwi Property for $230 million, raising $93.9 million to partially fund the deal and issuing shares giving Kiwi Property a 19.99 per cent stake.

The larger property investor would also buy NPT's management contract for $6 million.

Salt Funds managing director Matthew Goodson criticised NPT's adviser Northington Partners for not comparing the final terms of the deal to what was originally proposed, saying Kiwi Property was initially going to pay $53m for its cornerstone stake, but that was now reduced to $47.9m, while still receiving the same price for their buildings.

"Salt is surprised that NPT's adviser Northington Partners has not drawn attention to the material differences in KPG's (Kiwi Property) final proposal and has instead set up a 'straw man' to compare against in the form of Augusta's long-withdrawn proposal from mid-2016 when listed property prices and interest rates were at very different levels," Mr Goodson said in his second open letter in a week.

"Salt has no issues with KPG's capabilities but this proposal represents an unacceptable transfer of value from NPT shareholders to KPG."

Salt Funds has owned 16.9 per cent of NPT since June 24, 2016, and held 5.3 per cent of Kiwi Property as of January 16 this year.

Last week Mr Goodson came out in opposition to the Kiwi Property deal, and urged fellow shareholders to reject it.

Shareholders will vote on the proposal on April 21 with the Kiwi Property deal backed by the board.

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