Last orders called for Powerco bidders

By CHRIS DANIELS

Last bids for a half share of lines company Powerco are being finalised before Friday's deadline for offers.

Global finance and banking company Babcock and Brown has been tipped by Australian financial media as one of the last group of short-listed bidders. News of any sale is expected within two weeks of the deadline passing.

New Plymouth District Council, Taranaki Electricity Trust and Powerco Wanganui Trust decided to sell the stake after the Business Herald reported in April that Powerco was in merger talks with NGC. That prompted NGC to disclose it was in talks with Powerco and the Auckland lines giant Vector on "potential opportunities".

This year the Powerco share price has ranged between a March low of $1.87 and a high in late May of $2.20. It finished trading yesterday at $2.12.

Other companies tipped as potential bidders are the Australian Gas Light Co, the Australian Pipeline Trust and ANZ Infrastructure Services - the private equity arm of the Australia and New Zealand Banking Group.

The district council said the "majority of bids" were at a premium to market prices. But cracks have appeared in the united front it previously presented on the sale.

Local paper the Daily News has reported councillor Sherril George as claiming she was "railroaded" into approving the Powerco sale. Twelve of the 16 other councillors then sent an open letter to the newspaper, challenging George's statement, saying all options had been discussed.

George had objected to some of the restrictions of commercial confidentiality, such as not being allowed to take notes in meetings.

She later told the newspaper that they "never had the same attention paid to the other options ... why it was so important to sell, rather than save the asset."

Craig Rice, of PricewaterhouseCoopers, which is running the sale, said the council and trusts had given a price threshold, with a commitment to sell should any of the bids meet or exceed it.

Rice said the final bids would be analysed after this Friday. There could be a need to clarify aspects of the bids and talk to the bidders.

The inevitable full takeover offer for the rest of Powerco's shares (shareholders must be offered the same price) may cause ripples.

The price could, if pitched low enough, be like the Origin offer for Contact - enough to get a trade sale but not enough to succeed with any other shareholders.

Last week, Origin paid US energy giant Edison Mission $1.68 billion for 51.2 per cent of Contact Energy. At $5.67 a share, that is is well below market prices of more than $6 each.