ASX-listed Origin and NZX-listed Contact propose to merge but keep separate legal identities and their own stock exchange listings.
The two companies said yesterday that they had obtained approvals in principle from the New Zealand Takeovers Panel, the Australian Securities and Investment Commission, the Australian Stock Exchange and Australia’s Foreign Investment Review Board.
But they were still progressing approvals and waivers from the New Zealand Stock Exchange and the New Zealand Overseas Investment Office.
Contact said it expected to mail the explanatory memorandum to shareholders by early July, instead of its original target of later this month. The company hopes to hold the necessary shareholder meetings by early August and complete the transaction by the end of that month.
Full details of approvals, exemptions and waivers would be made available once they were finalised.
Initial institutional speculation about the proposed merger was that the rationale for combining the companies was sound but it undervalued Contact, New Zealand’s largest listed energy company.
Financial commentators said the merged ContactOrigin, which would give Origin a 75.7% stake in the enlarged company instead of its current 52.4% in Contact, would increase Origin’s control at no extra premium if done at the recommended Contact valuation of about $NZ7 per share.
In early morning business on the NZX today, Contact shares were trading in a band between $NZ8.02 and $8.05.
Contact spokesman Pattrick Smellie told EnergyReview.net that Contact shares had surged sharply immediately after the merger announcement but the ratio between the companies’ shares had subsequently remained in a narrow band around the proposed merger ratio.
“Contact and Origin shares have been trading in lock-step at or about the merger ratio since the merger announcement. This is some evidence that the markets expect the transaction will proceed,” Smellie told EnergyReview.net.
But he said the transaction, which required quite a variety of technical and regulatory approvals on both sides of the Tasman, was something new to the New Zealand market and, to a lesser extent, the Australian market.
Despite these complexities, the overall merger process was going well, Smellie said.
