Chairman of NZ Post, Sir Michael Cullen and chief executive Brian Roche announce plans to partially sell Kiwibank in April.

NZ Post has seen the value of its stake in Kiwibank plunge by around $100 million since it announced it was planning a partial sale in April.

On Monday the state owned postal service announced that it had agreed to sell a 47 per cent stake in its banking business for $494m.

The shareholding stays in public ownership, with investment coming from the New Zealand Superannuation Fund and the Accident Compensation Corporation (ACC).

While this appeared to be only a slight deterioration compared to the deal signalled in April - $495 for 45 per cent - NZ Post will see much less of the proceeds than it expected, with investors convincing the owners to leave $90m cash in the business.

Now, NZ Post will withdraw only $414m. Although Kiwibank's balance sheet will be healthier, the deal implies the bank's value has dropped to around $1 billion from the $1.1b signalled in April.

NZ Post has tried to play down the significance of the change, but when the deal was announced, NZ Post chairman Sir Michael Cullen was adamant the company would not be screwed down on price.

"The current indicative price valuation of eleven hundred million [dollars], $495 million to us, is right at the bottom end of our level of comfort and acceptability," Cullen, the former Minister of Finance, told reporters.

"If as a result of [due diligence] investors were to attempt to chisel us down some significant amount then I think there would be some very serious questions about whether New Zealand Post would be agreeing to that."

Asked directly how much of the proceeds would be reinvested into Kiwibank, Cullen was adamant that a capital raising was a separate issue.

"None of that [$495m] goes into Kiwibank to grow the business. This is a payment to New Zealand Post."

NZ Post chief financial officer David Walsh said the company was "comfortable" with the decision to add capital as part of the transaction.

"That value stays in the bank. We see that as a positive and a strong thing for the bank."

Walsh said since the transaction had been announced, Britain had voted to leave the European Union, while the official cash rate had been lowered.

"There's been a lot going on in the market and I think you'll find most banks have had a reflection [of that] in their share value as things have changed over the past six months."

Under terms announced on Monday, NZ Super is paying $263m for a 25 per cent stake, while ACC will pay $231m for a 22 per cent stake.

The government will get a $200m one-off special dividend.

Chief executive Brian Roche said negotiations had been complex and New Zealand Post was satisfied the deal was in the best interests of Kiwibank.

"It's a fair price that reinforces the investors' confidence in Kiwibank as a good long term investment, while also reflecting the prescribed limits on their ability to on-sell their stakes and the general market conditions faced within the financial sector."

In a statement, NZ Super said the amount it had paid for Kiwibank had fallen as a result of weaker results in recent months.

Chief executive Adrian Orr welcomed the chance to make another substantial investment in New Zealand.

"Investment opportunities of this size and potential are rare in New Zealand," Orr said.

"As a New Zealand investor with a long-term view, strong financial expertise and available capital, the NZ Super Fund is in an excellent position to help Kiwibank achieve its long-term promise."