As had been widely tipped, Vector announced this morning it had entered into an agreement to buy AGL’s 66.05% shareholding in NGC for NZ$3.00 per share, less any dividend paid by NGC prior to completion. AGL holds over 292.47 million of NGC's 442.79 million issued shares, which closed on Friday at NZ$3.06.

NGC today said it expected to receive a formal notice of the takeover offer from Vector shortly and that it would be engaging an independent adviser and providing a target company statement to all NGC shareholders.

NGC’s independent directors, Richard Bentley (a former NGC chief executive), Rick Bettle and Fran Wilde (a former Labour Cabinet minister) will oversee NGC's response.

As previously reported by EnergyReview.Net, as many as 20 different parties - including Australian Pipeline Trust, Aussie infrastructure investor Duet and perhaps Alinta - had been interested in AGL’s stake in NGC. Genesis Energy boss Murray Jackson confirmed to ERN last month that his company was also interested in NGC, but only its large industrial and commercial customers and LPG business.

Vector chairman Michael Stiassny said the deal, worth NZ$877.4 million, was a major achievement for the company, and was consistent with Vector's long-term strategy for growth as an owner and manager of critical infrastructure assets.

"The purchase of a majority shareholding in NGC is an exciting step forward for Vector as it provides the company with a number of complementary businesses for its current portfolio. The company has a range of high quality assets which will not only enhance Vector's strategic position, but also continue to play a major role in the country's energy industry."

Stiassny also said the deal was a significant milestone for New Zealand. "Given recent public debate on foreign ownership, we are pleased to be able to bring another valuable infrastructure asset back under majority New Zealand ownership."

Vector, which may now seek listing on the New Zealand share market, is obliged to make the same offer to all other NGC shareholders. The Commerce Commission may also investigate the proposal, given Vector and NGC’s extensive holdings in gas reticulation networks.