Cash payments part of Powerco takeover

1.00pm

Prime Infrastructure is prepared to pay about 25 per cent of Powerco's stockholders entirely in cash for their shares.

The Australian investor made that clear today in a formal notice of a takeover offer to Powerco, New Zealand's second biggest electricity networks company.

The offer follows Prime's securing 53.65 per cent of Powerco in August from Powerco's three biggest shareholders -- New Plymouth District Council, Taranaki Electricity Trust and Powerco Wanganui Trust.

Prime is bound by takeover laws to make a full takeover offer to Powerco's 20,000 shareholders.

Its offer is $2.15 a share -- 62.5 per cent in cash and 37.5 per cent in Prime debt securities. Market commentators have said the securities will be hard to sell to Powerco's shareholders, who would prefer cash.

Prime said small shareholders and Powerco bondholders who would receive an unmarketable parcel of Prime debt securities with a value of less than $1000 would receive 100 per cent cash for the Powerco shares and bonds. That would be $2.15 a share and $1 a bond.

About 25 per cent of Powerco's 20,000 shareholders, being those with a shareholding of less than 1241 shares, would be eligible to receive 100 per cent cash.

Prime is offering to pay shareholders 100 per cent in debt securities if shareholders want that. The three big shareholders are taking the cash and debt securities combination.

The offer document will be mailed to shareholders and bondholders. The offer will formally open about October 4 and close on November 2. Shareholders eligible to take up the offer have to be on the register on September 24.

- NZPA