INDEPENDENT Newspapers plans to acquire the outstanding shares in New Zealand newspaper group, Wilson & Horton (W & H), have been enhanced after an independent appraisal of the Independent offer concluded that the NZ$10.50 per share offer is fair.

The independent directors of W & H engaged Southpac to carry the appraisal and the consultants concluded that W & H shares are worth between NZ$10.20 and NZ$11.10. The value of Independent's preference share alternative to the cash offer is estimated at NZ 11.47 by Southpac, suggesting that W & H shareholders are likely to opt for the share alternative.

In its assessment, Southpac said that the key benefits of the preference shares which eventually convert into Independent shares are they provide an ongoing exposure to W & H, provide an exposure to Independent's international business and provide a fixed dividend stream for seven years.

Yesterday, Independent shareholders approved the bid which puts a value of £442 million on W & H, and the bid officially starts next Tuesday when Independent can go into the market to buy W & H shares. The board of W & H is expected to issue a document next week which will include a recommendation to shareholders.

But some analysts believe that the Independent bid is unlikely to get 100 per cent acceptances and some have suggested that Independent will be content with a majority stake that will give it control of W & H's huge cash flow.

Wilson & Horton shares fell from NZ$10.70 to NZ$10.57, marginally above the Independent bid price. The shares had reached a high of NZ$10.75 after the bid was announced, but the prospect of Independent making a higher bid to get 100 per cent control is seen to have diminished as a result of the Southpac report.

But some analysts believe that the bid is not high enough for Independent to get full control and have even questioned whether Independent wants full control. "Notwithstanding the Southpac conclusion that the offer is fair at NZ$10.50, I think Independent will be very hard pressed to acquire the balance of the company at that level," said Cavill White analyst Mr John Cairns.

I would think that their primary objective is to get in excess of 50 per cent so that they've actually got control of the cash flows. But over and above 50 per cent, I'm not sure how intent they are. Because if they are intent on doing that, I believe that they would have offered a higher price," said Mr Cairns.

It would not be a new experience for Independent to have majority shareholders in its overseas operations. In South Africa, Independent has just 60 per cent of its publicly quoted local subsidiary.