Media reports today have concentrated on likely demand from these three pools of potential Vector shareholders, all vying to get shares in Vector’s NZ$593 million IPO that scheduled to close in August.

NGC shareholders are being allocated NZ$380.4 million from the float, with Vector capital bondholders in line for NZ$153.6 million. This leaves NZ$59 million worth of shares for the 286,000 beneficiaries of the Auckland Energy Consumer Trust that owns Vector.

The New Zealand Herald newspaper reports that probably only 15-20% of eligible AECT beneficiaries are likely to buy Vector shares, meaning those who decide to purchase could buy an average of NZ$1375 of shares.

The Dominion Post predicts the public may be starved of Vector shares, with only a small pool available, as institutions have already begun buying NGC shares and now hold more than half of the outstanding stock (32.5% of NGC) sought by Vector in its takeover bid.

Institutional investors were probably buying NGC shares during yesterday's market session as a way of getting Vector stock, with over 720,000 NGC shares traded. NGC shares, which earlier this week hit a NZ$3.72 high, ended yesterday lower at NZ$3.68.

Institutions have also been buying Vector bonds in the past few months as bondholders are entitled to buy NZ$500 of Vector shares for every NZ$1000 of bonds they own.

Given the active trading above the NZ$3.40 per share Vector offer, analysts are predicting a listing premium of over 12%.

Analysts also expect a high level of NGC shareholders to accept Vector's offer of cash and Vector shares for NGC stock, with any acceptance level above 90% enabling Vector to compulsorily buy all NGC shares.

Vector will pay NZ$3.40 for each NGC share – NZ$0.78 in cash and the rest in new shares that will have an issue price of NZ$2.62.

The minimum AECT beneficiary purchase of Vector shares is NZ$500, while the public will have to purchase at least NZ$2000.