KEY POINTS:
Contact Energy shareholders have been told that if the UK company trying to take over Origin Energy is successful, then they too will be offered cash for their shares.
Britain's BG Group is launching a $A12.9 billion ($NZ15.96 billion) takeover proposal for Origin, Australia's second biggest electricity and gas retailer and 51.36-percent owner of Contact.
Questions have been raised about what BG Group plans to do with Origin's stake in Contact if the bid succeeds, with some analysts expecting a sale.
On Friday BG said it had spoken to the New Zealand Takeovers Panel and today's announcement is the result of those discussions.
It said it applied to the panel for an exemption under the Takeovers Code, which would have forced it to launch a matching offer for Contact an "upstream acquisition."
BG Group said today the Panel had granted its exemption - meaning it did not have to launch an immediate takeover attempt on Contact. But it would have to make a move within one month of a successful Origin takeover.
"It is a condition of that exemption that, if the proposed acquisition of Origin is successful, BG Group make a follow-on offer," said its announcement.
The following would apply to any such follow-on offer:
"The New Zealand Takeovers Panel (NZTP) would require BG Group to make a cash bid for Contact within one month of the offer becoming unconditional;
That bid would have to be at the value per share attributed to Contact by BG in the price payable for Origin shares;
That value would be verified by a NZTP-approved independent expert and it would be on terms and conditions approved by the NZTP. The conditions would also include the approval of the New Zealand Overseas Investment Office ("OIO")."
But if Origin's shareholding in Contact falls to 20 per cent or lower, then the takeovers code would not apply, so there would be no requirement for BG to make a follow-on offer.
"The Board of BG Group, when fixing the proposed price of A$14.70 for the acquisition of Origin shares, did not attribute any premium to the market price of Contact shares."
BG Group has not yet made any application to the OIO.
- NZ HERALD STAFF, additional reporting by NZPA
