New Zealand Business Times - October 19
Terror Strikes Crunch NZ Funds Page 1
The funds management industry is facing a cash crunch, as investors put the brakes on new investment following terrorism
attacks and the fear of global recession. The net flow of cash into managed funds has slowed to virtually zero and could
turn negative, after rising by $250 million to $300 million a quarter for more than a year. According to FundSource, a
group which monitors the performance of the funds management industry, the previous ³reasonably healthy² inflow of funds
has all but dried up. In other countries, cash is moving from share funds to bonds and fixed interest investments, but
in New Zealand it appears people are simply holding onto their money.
Michael Hill Plans UK and Nth American Expansion Page 1
The Michael Hill Jeweller, empire is about to get bigger, with the company planning to open stores in the United Kingdom
and North America. But after some costly failures with a previous expansion plan, including a disastrous and expensive
move into shoe outlets, the company is being cautious about its growth proposals. Michael Hill the high-profile
founder and chairman of the $200-million listed company that bears his name will not yet reveal the specific plans for
new stores, but he confirmed that ³one of these days we certainly will strike out². ³We can¹t stay just in Australasia
forever, and it is just a matter of waiting our time and keeping doing research and checking on situations,² Mr Hill
told the New Zealand Business Times.
Institute Angry With Rogue Major-Company Directors Page 2
The Institute of Directors is angry that a few high-profile directors are poisoning the reputation of their professional
colleagues. The institute is investigating why so few directors of large listed companies are members of the institute,
and therefore not bound by its Code of Proper Practice. The anger stems from a preliminary study that revealed only a
quarter of directors of companies that have received bad media coverage because of perceived corporate governance
weaknesses were members of the institute. The institute looked at directors of Air New Zealand, Brierley Investments and
Fletcher group companies over recent years and found the majority were not members of the institute.
Peace Software Prepares IPO Page 3
Privately owned Auckland-based technology developer Peace Software is gearing up to issue details of its financial
records to the market, in the first step towards an initial public offering of shares. Peace chief executive and founder
Brian Peace said he has ³run the numbers² through brokerage Credit Suisse First Boston in the United States in
preparation to release financial data at the end of this year. The proposal to inform the market will be followed by the
IPO, which aims to raise funds for further expansion. ³ Even though we are a private company we are operating as
semi-public in the sense we are structured like we are in the public domain. We are going to start to share more of our
financial data,² said Mr Peace Carter Holy Harvey Plays Hardball on CNIFP Assets Page 3
Carter Holt Harvey is not prepared to deliver the asking price for the collapsed Central North Island Forest Partnership
(CNIFP) and if it misses out on part owning the vast estate it is likely to make sure no one else makes any money out of
the trees. That is the depressing outlook for the key forests put by Carter Holt¹s chief operating officer, Jay
Goodenbour. Mr Goodenbour this week confirmed Carter Holt is among four bidders vying for the former partnership between
Fletcher Forests and China¹s Citic group, but he said what Fletchers and others believe the forests are worth is ³way
out of bounds².
Merger Activity Buoyant Despite Terror Torment Page 4
Last month, Auckland-based investment banker David Belcher was in New York, talking to investment and fund managers
about some opportunities for investment in New Zealand. It was so-called off-market transactions that Mr Belcher was
seeing contacts about in the United States, when the terrorism attacks struck on September 11. The business meetings
were cancelled, but itthe merger and acquisition activity that he was there to promote has, if anything, become
stronger. ³The level of interest we are seeing in deals has got larger,² Mr Belcher said this week.
Contact Shareholders Seek More Dough Page 6
Shareholders in Contact Energy are expected to now receive their company¹s final dividend for its 2001 financial year,
on top of a takeover offer for the company. An offer by Edison Mission to pay $3.85 a share for the 50 percent of
Contact it does not already own has been dismissed by most brokers as mean and opportunistic. The offer was to have
closed at the end of November and shareholders who accepted it would have missed out on the final dividend. But brokers
now expect it to be extended beyond the dividend payment period and increased following an ³independent² review.
Columbia-Tristar Bends Rules For Final Fantasy DVD Release Page 6
Entertainment giant Columbia Tri-Star is breaking its own distribution rules in order to release the Final Fantasy DVD
to the New Zealand ahead of schedule. It is the first time a so-called ³Zone One² DVD, not usually released to retail in
New Zealand until after release in major world markets, will be available locally at the same time as in the United
States. New Zealand and the US will be the first in the world to get the Final Fantasy DVD on October 23rd. Columbia
Tri-Star has previously taken action against retailer DVD World for selling Zone One DVDs to rental companies in New
Zealand, including Video Ezy and United Video, ahead of their worldwide release.