Investors asked to OK Contact merger

Thousands of mum and dad shareholders in Contact Energy are being asked to approve a merger with its Australian parent company.

The proposal is a first for the New Zealand stock exchange.

A former Government-owned power company, Contact was privatised in 1999 and is now the second biggest company on the stock exchange, worth more than $4 billion.

It has more small shareholders - the so-called mum and dad investors - than any other.

Contact is 51 per cent owned by Australian company Origin Energy, which bought its stake from US investor Edison Mission in 2004.

Having already rejected two takeover offers - one from Edison in 2002 and another from Origin in 2004, Contact shareholders were yesterday given details of the merger deal.

The arrangement would be a New Zealand first, leaving Contact and Origin listed on their respective stock exchanges, but effectively operating as one.

Contact shareholders, who will soon be sent information on the plan, must now approve the merger, but do not have to exchange or sell their shares. Under the plan, Origin shares and Contact shares will have the same voting rights and get equal dividends.

Known as a dual listed company, it will be called ContactOrigin and be run by a common board and unified senior management team.

Contact chief executive David Hunt resigned yesterday, saying his departure, for personal reasons, should not be seen as any reflection on the merger plan. He would not say what the personal reasons were.