Vector's NGC buy on again

By CHRIS DANIELS

Vector's takeover bid for NGC is back on track, now it has agreed to buy shares outright from its Australian sellers.

The Auckland powerlines company said yesterday that it had done a deal with Australian Gas Light (AGL) to directly purchase its majority stake in local gas transmission company NGC.

Formal takeover documents will be sent out to all NGC shareholders within the next couple of weeks.

Vector was earlier denied permission by the Takeovers Panel to simply buy AGL's holding company, meaning it has now to buy the shares direct.

It is paying AGL $2.91 a share for its 66 per cent stake in the gas pipelines company. The offer price was originally $3, minus any dividends due to be paid by AGL.

A 9 cent special dividend has since been announced, bringing the offer price down.

NGC's remaining shareholders seem to be holding out in the hope of a better price, since the company's share price on the NZX has been rising steadily ever since the takeover was announced. Its shares are trading at $3.15 each.

Vector, as the largest powerlines company in New Zealand, will have huge gas transmission assets if it is able to fully consume and de-list NGC. It is helping to pay for the $1.3 billion deal by floating up to 24.9 per cent of the company and listing on the stock exchange.

Its initial public offering (IPO) is tipped to be one of the hot investment prospects of 2005.

Vector and AGL's initial deal was scuppered by the refusal of the panel to grant an exemption to its rules, which would have allowed Vector to buy a holding company, rather than all of the NGC shares.

The panel had recently granted a similar exemption to Australian energy company Origin Energy.

The panel said yesterday AGL was trying to avoid paying $80 million in New Zealand tax and said an exemption was not an appropriate use of its statutory powers.