Brian Gaynor Blog

Auckland International Airport shareholders have been treated much better than former Wilson & Horton shareholders who accepted securities rather than cash in the 1997 takeover.

These securities converted into shares in the Dublin based Independent News & Media (INM), where Tony O'Reilly has lost control as the company has struggled to survive.

On Monday 30 November last year INM mailed a prospectus to shareholders containing details and an application form for a 59 for 50 rights issue at €0.05 a share.

The prospectus, which was mailed from Dublin, didn’t reach New Zealand until the week beginning Monday 7 December. Most New Zealand shareholders were frustrated in their attempt to participate in the rights issue because they had to send a Euro cheque, the offer closed on Monday 14 December and the mail was particularly slow because of the pre-Christmas rush.

New Zealand investors were furious with the way they were treated and the issue’s tight timetable.

However they have not been disadvantaged because one of the conditions of the INM’s issue was that the company would sell rights that weren’t taken up and the proceeds would be returned to shareholders. New Zealand investors received €0.05 for every right not taken up and INM’s share price is currently only €0.10.

Thus New Zealand investors would have been no better off if they had got their application back to Dublin time.

Individual investors in Auckland International’s 1 for 16 rights issue at $1.65 a share do not have to accept the offer until 18 February. There will be no rights trading but entitlements not taken up will be sold through a book build with the proceeds returned to non-participating shareholders.

Individual investors are being offered a good deal, particularly as the institutional offer will be completed two weeks earlier and a post-issue share price will be established before retail investors have to make their decision.