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Brisbane-based Prime Infrastructure had just sent out its amended offer to the New Plymouth District Council, Taranaki Electricity Trust and Powerco Wanganui Trust when the Wellington-based panel announced - after the New Zealand Stock Exchange had closed - that the deals might breach its own takeover code if found to be unfair to other Powerco shareholders.
New Plymouth Mayor Peter Tennent said the panel had “definitely mucked it up” regarding its cash-only exemption to foreign security holders - which had threatened the local authorities’ agreed 62.5%-37.5% split between cash and Prime bonds. However, he said he was comfortable with the panel investigating any possible breaches.
“I am confident that everything is all above board; Prime found part of the answer and the PricewaterhouseCoopers found another part of the answer. I do not think they are linked,” Tennent told EnergyReview.Net this morning.
Prime had promised to pump more cash into the deal, above the previous NZ$425 million limit, while PWC had arranged for Sydney broker Tricom to buy bonds the three big shareholders received above the 37.5% limit, up to a cap of NZ$50 million.
The panel’s announcement has had little immediate impact. It has not issued any interim restraining orders and is scheduled to hold a private meeting of all parties in Auckland next Tuesday to determine if the arrangements contravene the code’s rule 20 that guarantees all shareholders equal treatment under a takeover offer.
However, Tennent says he would like the matter resolved before then. “Everybody has the facts, so let’s get around a table and get it sorted before next week.”
Prime managing director Chris Chapman has said his company’s amended offer is in accordance with the takeovers code and that Prime had no knowledge of the arrangements between the local bodies, their advisers and Tricom.
The Powerco acquisition was still expected to be immediately accretive for Prime Infrastructure on a cashflow per share and an EV/EBITDA basis, notwithstanding the potential for additional cash funding by Prime, Chapman added.
