GPG's bulk-buy nets millions of Contacts

By Geoff Senescall

Guinness Peat Group has been quietly hoovering up Contact Energy shares at prices below 300c.

While GPG's local boss, Tony Gibbs, declined to comment, brokers say it has bought several million shares - possibly as many as 10 million.

Floated by the Government at 310c this year amid intense hype which attracted around 225,000 New Zealanders, the shares have not lived up to expectation.

In August, they fell to a low of 291c. But they have since recovered and yesterday closed at 310c.

Brokers say the key for Contact's performance is its 40 per cent US-based shareholder Eddison Mission, whose buying embargo lapses in November.

Eddison paid the equivalent of 500c a share for its stake, and many are picking it will take advantage of the relatively low prices at which the shares are trading to top up its holding to at least 50 per cent.