National postal operator New Zealand Post (NZ Post) has received an indicative offer from the Crown’s two major investment funds, the New Zealand Superannuation Fund and the Accident Compensation Corporation (ACC), for part ownership of Kiwibank and its associated services.
The proposal would mean that the two funds would hold a combined share of 45% of Kiwi Group Holdings (KGH), with New Zealand Post retaining the remaining 55%. KGH acts as the holding company for Kiwibank, Kiwi Wealth Management and Kiwi Insurance.
The offer, which is subject to due diligence, has been priced on a commercial basis, and reflects the New Zealand government’s position that Kiwibank must remain in public ownership. The offer is based on valuing KGH at NZ$1.1bn (US$750m), which would mean New Zealand Post would receive NZ$495m (US$340m).
Sir Michael Cullen, chairman of New Zealand Post, said, “No deal has been finalized yet and it will take some weeks for a process to be worked through, however we wanted to be proactive in our disclosure.
“New Zealand Post approached the government and pursued the initiative because it considers that NZ Super Fund and ACC are strong potential shareholders for Kiwibank as a Crown-owned bank. The two investment funds hold assets of over NZ$60bn (US$40bn) between them, while New Zealand Post continues to face headwinds in its core mail business.
“We believe now is the right time to broaden the bank’s support base within the wider public sector, and this provides the NZ Super Fund and ACC with a rare opportunity to secure a significant minority stake in a large and well-performing unlisted New Zealand business.”
April 6, 2016