Iwi challenge delays Horizon takeover

The Eastern Bay Energy Trust has parked its takeover offer for Horizon Energy Distribution while it seeks legal clarification on whether it can actually buy the remaining shares in the NZX-listed lines company, following a challenge by a Bay of Plenty iwi.

The trust, which already owns 77.3 per cent of Horizon, said yesterday it was seeking legal advice before making an application to the High Court to decide whether its trust deed allows the takeover.

Last Friday, Matata-based Te Mana o Ngati Rangitihi Trust sought an interim injunction to stop the counting of votes in a poll of Horizon consumers - needed before the takeover could proceed.

The High Court at that time did not halt the counting but both parties agreed not to announce the result until a substantive hearing on the injunction, which was due to have taken place in Auckland yesterday.

The trust took specialist legal advice in relation to the terms of the trust deed, which led to the decision to seek the High Court ruling, said chairman David Bulley.

The deed says the trust can have a base holding of 25 per cent but if it wanted buy more shares it had to poll more than 50 per cent support from beneficiaries.

However, the trust's lawyers warned that it could be legally challenged and it needed to be clear what the deed allowed.

Bulley said the delay was frustrating. The iwi's actions had "come out of the blue".

Iwi chairman Graham Pryor said the energy trust's 20,000 beneficiaries were not properly informed about the takeover.

Eastern Bay Energy had been seeking consumers-beneficiaries' approval to borrow $20 million for the takeover deal but Pryor said it did not provide information such as a financial analysis, whether the energy company had sought or taken any advice on the takeover, or what the financial impacts of the purchase would be.

- NZPA