Prime succeeds with messy Powerco deal

By CHRIS DANIELS


Prime Infrastructure's troubled takeover of Powerco was completed successfully last night in a flurry of 94.6 per cent acceptances.

Prime chief executive Chris Chapman said achieving more than 90 per cent was a solid outcome that benefited not only Prime but all Powerco stakeholders including customers.

Chapman, who yesterday warned shareholders to accept the offer to avoid having their shares compulsorily acquired and paid for in bonds, said Prime was excited at the prospect of introducing Powerco to the Prime story.

The takeover has been controversial from the moment the New Plymouth District Council and two community trusts decided to put their 53.6 per cent shareholding in the power lines and gas pipeline company up for sale.

Prime won the bidding war with its $2.15 a share price, but its method of payment - part cash and part unsecured, unrated and widely unpopular bonds - provoked ire.

Powerco's share price closed yesterday at $2.05, down one cent.

Finance Minister Michael Cullen said yesterday the Prime takeover "barely met" the national interest criteria that needed to be applied by Government.

He was asked in Parliament by NZ First leader Winston Peters to expand on his statement last month that there were "aspects of the sales process" that had concerned him.

Cullen said it "was with great reluctance" that he was letting the deal proceed, but any refusal to permit Prime to buy the lines company could have been challenged under judicial review.

Peters then asked Cullen if the possibility of a judicial review concerned him more than adhering to the Overseas Investment Act, "which lists eight reasons why his approval of the sale of Powerco is not in the national interest?"

Cullen said his own views "were leaning towards declining the sale. I was strongly advised, not just by the Overseas Investment Commission, that a negative decision from me was unlikely to succeed under judicial review."

Announcing his reluctant approval last month, Cullen said Prime clearly met approval criteria, was of good character and had demonstrated the necessary financial commitment.