New Plymouth accountant Kevin Landrigan is leading small shareholder opposition - going under the name Concerned Ratepayers - and says the New Plymouth District Council (which last month sold its 38.16% stake in Powerco to Prime) had no mandate to sell, did not consult properly and did not even get a good price.

Landrigan is also worried that Prime's “high” debt levels will lead to Powerco being “milked for cash" and a subsequent under-investment in its infrastructure.

He predicts thousands of Taranaki-Wanganui small shareholders will reject the Prime deal, because existing Powerco shares will provide “better” returns than the bonds being offered by Prime.

New Zealand Herald business commentator Brian Gaynor says the indicative 8.5% debt securities being offered as part-payment by Prime are “far too low for an extremely high risk security". The bonds are not rated by any credit agency, are unsecured and subordinate, and have no fixed redemption or conversion rate.

However, Prime chief executive Chris Chapman has stressed the need to communicate to shareholders all the benefits of the offer. Shareholders will be offered the same deal, but can choose to be paid in cash, converting securities or a 62.5%/37.5% mix.

Although the Overseas Investment Commission still has to approve the sale that is expected to be a formality.

Last month Prime agreed to pay NZ$2.15 a share to the NPDC, Taranaki Electricity Trust and Powerco Wanganui Trust for a 53.65% stake in Powerco.