A verdict should at last be delivered in the coming week by the Commerce Commission on whether Foodstuffs or Woolworths will be allowed to buy The Warehouse.
The commission has now been considering the matter for close to six months. A "no" seems the most likely outcome, given the time taken, but nothing is certain here.
If the commission decides that it can't make a "no" fly through the bumpy process of appeals and court action that would follow such a verdict, then it might yet produce a "yes".
But given that the commission seems to be against either of the supermarket companies acquiring The Warehouse, the key point is whether it has the appetite for a big battle on this one.
A fledgling flutter
The Xero float is an interesting one, but comes too soon in the company's life for "mum and dad" retail punters.
Xero plans to sell Internet-based accounting software to small and medium businesses through monthly subscriptions. Co-founder Rod Drury has had previous success, selling e-mail business AfterMail to America's Quest for $65 million last year. Securing Trade Me founder Sam Morgan as an independent director adds tremendous credibility.
Xero cites salesforce.com, a US$5.6 billion New York listed sales force automation software provider, as one company successfully pursuing its planned business model. But Xero reckons its big international rivals, MYOB, Sage and Intuit, aren't well placed to adopt the Internet business model, which provides lower infrastructure costs and predictable revenue.
Xero decided to float, rather than seek private funding, for greater credibility when expanding overseas. It sees immediate New Zealand market potential of $90 million. It plans to open shop in Australia, where it sees three times as many customers, and Britain where it sees 13 times as many. The directors don't expect profits for at least three years, and don't anticipate paying dividends for the foreseeable future.
In the nine months to March Xero lost $1 million before tax and cites equity of just $1.7 million. It's similar to a venture capital investment opportunity.
-GARETH VAUGHAN
Shelling out
A great, if hazardous, pastime of the 1980s is back. It's called "spot the shell company and make a pile".
Anybody fortunate to have climbed into listed shell Vistron's shares at 24 cents each recently will have been gratified by the four-fold increase in their value in the week and a half since aggressive Queensland investor and financial services company MFS announced it was reversing its New Zealand arm into Vistron.
At the moment, Vistron is essentially an empty vessel, with a group of shareholders and a sharemarket listing. It is 70 per cent owned by sharebroker Brett Wilkinson, who has seen the value of his holding increase by about $2 million.
Till the details of the reverse takeover by MFS New Zealand are revealed, punters are guessing a bit about the likely value of the Vistron shares after the deal is done. But that's not the only punting going on. Holly Springs Investments is another listed empty vessel – also 70 per cent owned by Mr Wilkinson.
Its infrequently traded shares changed hands at two cents each on April 13. But when they next traded on May 21 – the day before the MFS deal with Vistron was announced – the price shot up to 10c. Subsequently the price has topped 30c, on very small volumes. One to watch, perhaps.
Having pie but not eating it
Unitholders in listed property trusts are set to benefit when the Government's new portfolio investment entities (PIE) tax regime comes into effect on October 1.
Under the new rules New Zealand investors will pay no further tax on cash dividends. But, according to ING Property Trust chairman Michael Smith, the changes have yet to be fully reflected in INGPT's unit price.
And you could probably say that about a couple of the other trusts as well, he believes. Four of the bigger trusts, ING, Kiwi Income, AMP NZ Office and Macquarie Goodman, are still trading below their net asset backing per unit.
-ANDREW JANES
