New Zealand Maori tribes buy bus operator, flex financial muscle

WELLINGTON Tue Aug 12, 2014 12:32am EDT

WELLINGTON Aug 12 (Reuters) - New Zealand's two biggest Maori commercial groups have joined forces to buy one of the country's major bus operators in a further example of their growing financial strength.

Ngai Tahu Holdings Corp Ltd and Tainui Group Holdings Ltd said on Tuesday they had bought Go Bus Ltd, one of the country's biggest public transport operators, from Australian private equity firm Next Capital.

"We look for businesses that are well run, have an ability to grow, and have strong underpinnings," said Tainui chief executive Mike Pohio.

He said Go Bus, which provides public bus services in half a dozen cities including the second biggest - Christchurch - offered growth and investment diversification.

Pohio declined to confirm media reports that the deal was worth NZ$170 million ($143 million). Ngai Tahu will hold two-thirds of the joint venture and Tainui the rest.

In February, the two tribes joined local private equity firm Pioneer Capital to buy the country's biggest dairy equipment maker Waikato Milking Systems Ltd.

They were also part of an unsuccessful bid for Transpacific Industries' New Zealand waste management business that was sold to the Beijing Capital Group.

GROWING MUSCLE

The deal is the latest sign of the growing commercial strength of New Zealand's indigenous Maori people, who make up about 15 percent of the country's 4.5 million, but top many of the tables of social and economic deprivation.

The two tribes have had a co-investment agreement since 2007 and Pohio said they were on the lookout for suitable investments and partners.

"We're looking for partners to further our growth, and private equity is an avenue, although they have a tendency to a short-term approach and that doesn't necessarily align with us and our longer-term horizon," Pohio said.

The South Island-based Ngai Tahu and central-North Island's Tainui received hundreds of millions of dollars in cash and land in the 1990s from the government to settle historic land grievances.

They have since turned the settlements into billion dollar entities, with extensive interests in property, farming, fishing and forestry, as well as investments in hotels, energy, and tourist ventures. ($1=1.1865 New Zealand dollar) (Reporting by Gyles Beckford; Editing by Neil Fullick)