Cullen gives reluctant nod of approval

By CHRIS DANIELS

Finance Minister Michael Cullen has "reluctantly" approved the Prime-Powerco deal although being concerned about some aspects, which he described as a "shambles".

Under the Overseas Investment Act, Cullen is required to endorse the takeover and said yesterday that it was not the Government's role to interfere in lawful commercial transactions, especially when they were this far advanced and "strongly supported by shareholders".

This is a reference to the New Plymouth District Council and two community trusts, who organised to sell their combined 53.6 per cent shareholdings in Powerco to Prime.

Cullen said Prime clearly met the criteria for approval, was of good character and had demonstrated the necessary financial commitment.

"It is, however, with great reluctance that I am letting the deal proceed as there were aspects of the process that concerned me," he said.

"Although the Audit Office found that the New Plymouth District Council was not required under the Local Government Act to consult ratepayers before deciding to quit its shareholding in Powerco, consultation would have been desirable given the size and significance of the asset involved."

The decision by the Takeovers Panel to grant a waiver allowing Prime to structure its offer differently for New Zealand and overseas shareholders "can only be described as unfortunate given the shambles which ensued".