Christchurch City Holdings Ltd has incrementally increased its majority shareholding in listed Lyttelton Port Company (LPC) to 75.01% - with Port Otago still holding a takeoverblocking 15.47% stake - but potentially leaving the port company open to a merger or amalgamation.
The now more than 75% stake meant a ‘‘scheme of arrangement'' to force an amalgamation or merger could be entered into and only required 75% shareholder approval, whereas a full takeover would have required 90% shareholder approval, forcing the remaining 10% of shareholders to accept the offer.
In April 2005, Port Otago grabbed its 15% almost $40 million stake in LPC, effectively blocking City Holdings' controversial bid for a 90% takeover, which sidelined its stated intention of on-selling the port to an international shipping company, which caused a furore in Christchurch at the time.
Yesterday, City Holdings confirmed it had increased its stake 0.95%, or 971,759 shares worth about $2.4 million, during the past almost five months.
Port Otago chairman John Gilks was contacted, but set aside the suggestion the increased City Holdings stake weakened Port Otago's position.
He said if City Holdings had gone for a ‘‘scheme of arrangement'' it would always have achieved that, but it had now moved from ‘‘99% certainty to absolute 100% certainty'' if it chose to make such a move.
He said Port Otago's intention was always to target a 15% holding and to have blocked a scheme of arrangement meant moving to a 25% holding ‘‘which we never had any intention of moving to''.
City Holdings chief executive Bob Lineham said in a statement yesterday that as the additional share purchase represented less than 1% of shares issued by LPC, it did not require formal notification to the stock exchange. Speculation of a merger between the rival ports has not prompted a formal move by either party.
