Vector gets clears another takeover hurdle

Vector has cleared another hurdle in its takeover of gas transmission company NGC, with the Commerce Commission giving its blessing to the $1.2 billion deal.

The purchase of the 66 per cent stake from Australian Gas Light (AGL) has gone unconditional and attention now turns to Vector's prospects of buying out minority shareholders.

Vector, the Auckland powerlines company owned by local consumers, is offering $2.91 a share to NGC shareholders, less than the market price.

Vector is floating up to 24.9 per cent of itself in an initial public offering (IPO) next year, as it hopes to raise at least $500 million to help pay for the NGC takeover.

It initially hoped to wow NGC shareholders into accepting the lesser price with preferential rights in the Vector IPO next year, but it withdrew this from the offer after the Takeovers Panel said this should also be provided to AGL.

 

NGC plans to send its response to the Vector offer - which includes an independent appraisal report - out to its shareholders at the end of next week.