Infratil waits to hear `fair price' for its gas shares

By FIONA ROTHERHAM

Utilities investor Infratil must wait until Tuesday to discover how much the Natural Gas Corporation will pay for its 6.7 per cent stake in the company.

Infratil invoked a rarely used Companies Act minority shareholder provision to force NGC to buy the stake it has held since last July.

It was able to do so after voting against a major transaction - the $824 million acquisition of electricity and gas retailer TransAlta approved at last month's NGC shareholders' meeting.

Yesterday, NGC confirmed it would buy back the 26,581,934 shares rather than arrange a third-party purchase or seek an exemption through the courts.

NGC now has five working days to come up with a "fair and reasonable" price. Because the buy-back is thought to be a first for a New Zealand listed company, what is "fair and reasonable" is yet to tested.

One analyst said: "I am sure the NGC offer will not be satisfactory to Infratil. It is all a game. Why should NGC pay more than it has to?"

NGC has hired an outside party to help work out the share value.

Infratil said last month that it expected the offer to be higher than the current NGC market price, which closed up 1c yesterday at $1.25.

It has tracked downwards since NGC, 71 per cent owned by Australian Gas Light, announced the TransAlta deal.

Infratil has 10 working days to consider NGC's offer. It can refer it to an independent arbitrator for a binding determination.

Under the act, NGC would then have to pay Infratil the amount it had offered as an interim step, pending the arbitrator's decision.

The TransAlta deal is being partly funded by a pro rata rights issue closing today that offers existing shareholders four new NGC shares for every five currently held.

Last month NGC wrote to shareholders advising of Infratil's move and offering them the chance to withdraw acceptance for the rights issue. Only two shareholders had so far changed their minds, NGC said.

Infratil's main energy asset is its 26 per cent stake in TrustPower. It built up the NGC shareholding when embroiled in a battle with AGL for control of TrustPower.