Following hard on the heels of Natural Gas Corporation, the publicly-owned company has applied for Commerce Commission approval to buy up to 100 percent of UnitedNetworks, through share or asset transactions.
However, it may subsequently on-sell parts of the electricity and gas networks, as well as UnitedNetworks' fledgling telecommunications business, based around fibre-optic loops in downtown Auckland and Wellington.
Natural Gas Corporation earlier this month applied to the Wellington-based commission to buy all of UnitedNetworks gas businesses.
UnitedNetworks is twice the size of Vector, with revenue to the December 2001 year of $455 million and assets of $2.28 billion. UnitedNetworks is worth about $1.38 billion by market capitalisation.
UnitedNetworks parent, American energy company Aquila (formerly the Missouri-based Utilicorp), which owns 70% of UnitedNetworks, wants to sell its Australasian assets to reduce its debt load and please international ratings agencies.
Commentators have recently linked Hong-Kong based CKI, which is to buy Australian electricity distributor Citipower in Victoria for $A1.56 billion, and Singapore Electric as other possible bidders for UnitedNetworks.
Vector is seen as a natural buyer of its neighbouring electricity networks, on the North Shore and Waitemata areas of Auckland, but commentators are unsure whether Vector will also want the electricity networks in the Coromandel, Thames Valley, Bay of Plenty, Taupo and Rotorua, and parts of Waikato and Wellington.
Vector was a bidder two years ago for the North Island gas networks bought by UnitedNetworks for $NZ550 million, so probably wants to bid again for UnitedNetworks' networks in parts of Auckland, Hawkes Bay, Wellington, Horowhenua and Manawatu.
New Plymouth-headquartered Powerco and Hamilton-based Wel Networks are companies that may want to buy parts of UnitedNetworks from Vector. Powerco would be interested in the Wellington electricity network and lower North Island gas networks, while Wel Networks would want the Waikato electricity network.
Vector yesterday downplayed its application for commission clearance, as did NGC in mid-July, saying its actions were only precautionary moves. Vector chief executive Patrick Strange said from overseas that commission approval was needed for any type of bid. The deadline for making indicative bids for UnitedNetworks was last Friday.
It is understood the potential buyers are about to start due diligence, before having to make final and binding bids late next month. The sale is expected to be largely completed by early September.
