Councils still ponder $160m Vector proposal

By CHRIS DANIELS

The future of the 10.7 per cent stake in UnitedNetworks owned by Auckland councils is still unclear, a meeting last night having failed to agree on whether they should accept Vector's takeover offer.

Representatives of the North Shore City Council, Waitakere City Council and the Rodney District Council met to decide what to do with the shares that are worth around $160 million.

Vector, which already owns more than 75 per cent of UnitedNetworks, is offering $9.90 a share, a deal that has been endorsed by independent valuers, but not yet accepted by the councils.

A new meeting of the councils was not set last night, but is expected soon, as the deadline for accepting the offer is October 23.

The UnitedNetworks Employee Share Scheme, which holds 1.7 per cent of the company, yesterday said that it would accept the offer, taking Vector's stake to about 77 per cent.

UnitedNetworks' 200 staff have been told in an internal memo they will be employed until at least February 28.

The memo says that the new, combined company does not intend becoming a gas retailer (lines companies are not allowed to sell electricity, but can be gas retailers).

The memo says it is too early to say what the structure of the new company will be.

Vector has told its staff that it has no plans to change the prices charged to any of its customers, including those bought from UnitedNetworks.

If Vector reaches a 90 per cent acceptance level it can compulsorily acquire the remaining 10 per cent, paying the outstanding shareholders the same $9.90 a share they would have already rejected.