In a scene reminiscent of Woody Allen’s classic movie “Take the Money and Run”, shareholders in Melbourne development firm Central Equity did exactly that yesterday… took the money and run… just as they have done for the past 20 years!
Despite minor descent from a few – read two – boisterous shareholders, Central Equity was yesterday put back on the path of privatisation.
The often wrongly maligned apartment developer will trade on the Australian Stock Exchange until 21 June.
Under the buy-out, investors will receive some $67.6 million or $2.15 per share. The buy-out comprises of a 56 cents capital component and a $1.59 fully franked divided.
Founding directors Eddie Kutner, Dennis Wilson and John Bourke – who control 55.6% of Central Equity – have no qualms about calling the buy-out a “big win for shareholders”.
Despite claims that there had not been enough time to organise number to oppose the buy-out vote, shareholders at yesterday’s extraordinary meeting in Melbourne overwhelmingly voted for the dismantling of Central Equity as a publicly listed company.
According to Kutner, Central’s Equity’s market realisation has jumped by $60 million to $180 million (as at close of trade yesterday) since announcing the buy-out proposal.
“We’ve unlocked $60 million in value, and we’re delighted for shareholders,” he added.
Kutner said he was proud of Central Equity and the returns the company had delivered since its listing on the ASX as a 20-cent company two decades ago.
“An accountant recently estimated that by re-investing dividends, every $1,000 invested in Central Equity then is now worth $60,000,” Kutner told the media gathering.
Kutner, a former accountant, and his two former school teacher directors will continue to develop property under the Central Equity brand after the public company is delisted.
“Central Equity has always been a pure property development company and it remains committed to property development following this shareholder vote,” told Australian Property Journal.
“The company will stay primarily focused on residential projects, but in light of the prevailing market conditions in the new residential sector, Central Equity will be operating on a tighter scale.
“Housing affordability is at a low and the recent interest rate move will have a further dampening effect. Central Equity plans to focus on the fundamentals and will continue to do it s best to deliver affordable housing that suits modern lifestyles.”
One well known Melbourne property personality summed up Central Equity yesterday: “What many people fail to recognise and appreciate is that Central Equity brought inner city living to Melbourne and consistently delivered first class result to shareholders. And for that they get criticised – don’t figure does it?”
Central Equity closed yesterday at $2.54 – up nine cents on the trade of just over two million shares.
By Nelson Yap
