Powerco price right say analysts

Analysts and investment bankers are sceptical that a council and trust-owned 49.9 per cent stake in power distribution company Powerco will sell.

As the June 11 deadline nears for indicative bids, market observers see the bullish talk from the New Plymouth District Council as ... just talk.

The council wants a premium of more than 25 per cent on the stake's market price which, at yesterday's share price of $2.14, was worth $336.8 million.

Analysts say Powerco shares are fully valued and the company is also vulnerable to gas-sector regulation. ABN Amro, for example, values the company's shares at $1.93.

A draft Commerce Commission report named it as one of the companies making excessive profits from gas pipeline monopolies.

The council says 20 potential buyers from North America, Asia, Australia and New Zealand have expressed an interest.