Industry commentators are more concerned, though, whether Vector’s NZ$3 per share bid will be enough to secure a total takeover deal of NGC - or even if Vector wants all of NGC.

“Standard and Poor’s credit watch is pretty standard stuff. Vector have previously indicated they intend to keep all of NGC’s assets and not spin any off. We will just have to wait and see if trying to raise the money causes them to change their mind,” one commentator told EnergyReview.Net.

Standard & Poor’s said that if the Vector acquisition was funded under the expected terms and conditions then Vector’s rating would be affirmed at 'BBB+', and NGC lowered to 'BBB+', reflecting its new parent.

While owning 100% would enhance Vector’s flexibility, from having the full control of the cash flows and operations of NGC, the additional cost in acquiring the remaining 34% of equity would likely result in a negative outlook for the group.

A major part of the decision to affirm the rating would be an assumption that Vector repays the equity bridge with full equity, either through the proceeds of an IPO or other means, within the next 12 months, adding the rating agency.

Vector is to pay NZ$877 million for AGL’s 66.05% shareholding in NGC and a full Vector takeover would create this country’s biggest energy networks company, with about NZ$4 billion in assets and NZ$1 billion in turnover.

However, NGC’s share price slipped six cents to NZ$3.00 yesterday, in line with the bid, with brokers and analysts predicting few of NGC’s 15,000 minority shareholders will find the offer attractive.

Vector chairman Michael Stiassny yesterday said ABN Amro Rothschilds would be providing equity bridge financing for Vector to fund the bid, with the rest coming from bank borrowings. Vector would float 24.9% of the company within a year to pay back ABN Amro Rothschilds.

Stiassny is reported as saying that if Vector can secure all of NGC, it will merge the two companies, thus creating some synergies. However, he said Vector would be "very comfortable" with only 66%. "We would like to have more; we will see how that goes; we will take as many acceptances as we can get."

Vector chief executive Mark Franklin is reported as saying the acquisition of NGC’s “complementary assets” will allow Vector to move upstream into the business of gas trading, transmission and distribution.