This article is from the Australian Property Journal archive
IT would appear corporate raider Guinness Peat Group has given up their ambition to take control of valued development group AVJennings.
Yesterday, amongst the market disarray following the Reserve Bank’s interest rate announcement, GPG announced late in the evening at 6PM that it had lost its call option rights to shares owned by LA Niederer & Company Ltd.
The company with the options is associated with LA Niederer, a director and major shareholder (18.6%) in publicly listed timber and building products manufacturer Bremer Park.
La Niederer ceased as a substantial shareholder of AVJ in March 16 last year, when it entered into an agreement with GPG to sell 11.4 million shares in AVJ.
But following GPG’s unsuccessful attempt to appoint two nominees to the AVJ board in September last year, the corporate raider decreased its call option for 2 million shares on December 13 2007 and has let an option on 4.3 million shares expire on February 01.
As a result, GPG’s voting power has been reduced from 11.48% to 9.13%.
Because of the late announcement, PropertyReview was unable to contact AVJ or GPG for comment.
GPG’s tactics to allow its option to expire and the company’s subdued presence at AVJ’s annual general meeting in November last year – could signal the end to the GPG’s attempt to carve up AVJ, which it proposed at an extraordinary general meeting in September last year.
And now questions will be asked whether GPG will now remain as a long term shareholder in AVJ or whether it will gradually reduce its stake in the developer.
Last year in an interview with PropertyReview, AVJ’s largest shareholder and Singapore’s 15th richest man, Simon Cheong said he was not concerned about GPG’s calls for AVJ to be sold off and the proceeds distributed to shareholders.
Cheong added that he had complete confidence in AVJ and its management, adding that he believed AVJ was undervalued.
“Property is a medium to long term business. It is important how you survive this tough market and come out stronger,” Cheong concluded.
The developer is now focused on growing through the acquisitions of large development sites with its joint venture partners Bank of Scotland International and in the commercial property side, recently entered into a JV with Ashe Morgan Winthrop to develop an office building at Sydney Olympic Park.
Australian Property Journal
