Time runs out for Edison offer rise

By CHRIS DANIELS

Hopes for a higher offer price for Contact Energy shares have been officially dashed, with the effective expiry today of a deadline for changes to the Edison Mission takeover offer.

The United States energy giant's offer of $4.14 for the 49 per cent of Contact shares it does not own runs out on February 3.

If it is to increase the offer, it must let all shareholders know within 14 days of the deadline. This, for all practical purposes, needed to have been done by now, says Edison.

Many in the broking community believe the $1.34 billion offer will fail and this is reflected in the difference between the current share price - around $3.90 - and the Edison offer of $4.14 a share.

ABN Amro analyst James Miller said a higher price was needed if the offer were to succeed.

"The current market price says that unless there is a change in the offer price, then it will fail, because the share price should be at least close to the offer price."

Bob Driscoll, Edison Mission's senior vice-president for the Asia Pacific region, was in New Zealand yesterday, talking to his advisers.

A company spokesman, Richard Ninness, said the 14-day deadline for altering the offer had in effect expired, as every shareholder had to be notified directly of any change.

"The offer is ... full fair and final."

Edison had decided not to launch an advertising campaign or promotion to encourage Contact shareholders to return acceptance forms.

Market research had shown that shareholders knew of the offer and did not need to be reminded of the deadline or the offer price.



About 8500 people had contacted the Edison call centre and website asking about the offer.

"People know it's happening and want to be left to make up their own minds," said Mr Ninness.

Edison Mission originally offered $3.85 a share for Contact Energy and nominated November 30 as the closing date. The offer price was raised to $4.14.

A final dividend of 11c a share has been paid.

Acceptance forms from Contact shareholders must arrive at Edison Mission by 11.59 pm on Sunday, February 3.