Guinness Peat to demerge Aust unit
Reuters
WELLINGTON - Investment group Guinness Peat Group Ltd (GPG) plans to split off its Australian business and eventually list its British subsidiary Coats, to improve returns to shareholders.
The British-based GPG, investment vehicle of veteran New Zealand corporate raider Ron Brierley, said the first step would be to demerge its Australian business and list it separately on the Australian and New Zealand stock exchanges as GPG Group Australia.
The demerged entity will have a net asset value of about $450 million. GPG's Australian assets include stakes in power company Alinta , building products firm Capral and interests in food, property development and financial services.
"This proposal will create an exciting and regionally focused activist investment company in Australia with the entrepreneurial flair to create value for shareholders," Mr Brierley said in a statement.
GPG would initially hold 20 per cent of the Australian business with existing shareholders being given shares in the new entity.
The remaining British and New Zealand assets would be retained in the existing company, with an estimated value of $950 million.
GPG would also look to float its underperforming major subsidiary, British threadmaker and zip manufacturer Coats plc, at some stage in the future, but there would be no immediate liquidation of other assets, which would destroy shareholder value, it said.
Shareholders would vote on the restructuring and demerger in November.
GPG has a large number of New Zealand and Australian shareholders after it was split off from New Zealand's Brierley Investments in 1991.
Mr Brierley, 72, a cricket lover and stamp collector, built a reputation as a fearless corporate raider from the 1970s by finding cheap, poor performing companies, exacting value through asset sales and restructuring, before selling.
His companies have had a history of solid shareholder returns through bonus share issues and special dividends.
He signalled the restructuring at GPG's annual meeting last month, saying the company had had two bad years and the need for substantial changes was "inescapable".
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