NZ Super Fund and ACC may join NZ Post as Kiwibank owners

New Zealand Post has received an indicative offer from the New Zealand Superannuation Fund and the Accident Compensation Corporation (ACC) to purchase 25% and 20% respectively of Kiwi Group Holdings (KGH) – the company that owns Kiwibank and its associated businesses such as Kiwi Wealth Management and Kiwi Insurance. The NZ Super Fund and the ACC are the Crown’s two major investment funds – so the set-up would mean that Kiwibank will remain 100% Crown-owned (i.e. public owned).

The offer is based on valuing KGH at $1.1 billion, which would mean New Zealand Post receiving $495 million.

New Zealand Post Group Chairman Sir Michael Cullen said that “no deal has been finalised yet and it will take some weeks for a process to be worked through, however we wanted to be proactive in our disclosure”.

Sir Michael added: “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 $60 billion between them, while New Zealand Post continues to face headwinds in its core mail business.”

Sir Michael said New Zealand Post has provided approximately $400 million of capital to Kiwibank over its lifetime. “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.”

The proceeds would allow New Zealand Post to invest in its core parcels, packages and letters business and pay down debt. It is anticipated that a special dividend would also be paid to the Crown, Sir Michael said.