Wel Trust Sets $21 Share Price For 100% Ownership
WEL Energy Trust announced today it will pay $21 per share to buy out the remaining 6800 small shareholders in Hamilton-based network company, the WEL Energy Group Ltd.
Trust chairman Don Bethune said the move is aimed at creating long term value for the community that is not available under the present ownership structure.
Advantages include a reduction in the company's operating costs, clear control on behalf of the community, and a much better ability to cope with the outcome of the Government's proposed regulation of the industry.
He said the $21 price "is an extremely generous offer for the small number of shares still privately owned."
"However, we believe that the overall value to the community justifies the high price we have set."
The $21 per share purchase price reflects an 86 percent premium on what shares were selling for in September last year when the Trust first announced it wanted to move to 100 percent ownership.
It is also significantly higher than the $16 the shares were trading at when the WEL company issued its " don't sell" notice to shareholders late last week.
Of the 6800 remaining shareholders who hold 879,293 of the 18 million shares on issue, almost 6100 still have their original parcel of 105 shares given to them free in 1993.
The largest private shareholder has 8105 shares, with the smallest parcel being just five shares.
Back in 1993, 65,000 WEL Energy customers received free parcels of 105 shares.
In the ensuing battles over foreign ownership, most customers cashed up their shares at prices between $7.50 and $14, with the Trust succeeding in moving from its original 33 percent ownership to over 46 percent, blocking control from going to American company UtiliCorp.
Mr Bethune said the acquisition of the remaining shares required a change to the company's constitution.
The company is expected to call a meeting of minority shareholders, immediately before a special general meeting of all shareholders, sometime before June where 75 percent of those who attend, together with proxies, are required to support the change.
The Trust will not vote at the minority shareholders meeting.
While Mr Bethune accepts some shareholders want to retain their investment in the company, now was the time for them to maximise the value of their shares.
"The new Government is undertaking an inquiry that is expected to result in increased regulation of the energy sector," he said.
" It is the view of some industry experts that there will be a significant reduction in the value of all distribution company shares, including WEL, and dividends will also be affected."
The Trust has written to all 6800 shareholders this week advising them of the price and of the need for their support for a constitutional change to enable the compulsory acquisition to proceed.
Once the constitutional change had been made shareholders would receive the cheques soon after.
Mr Bethune has also told shareholders that the directors of WEL company would be communicating with them soon on their view as to whether acquisition at $21 per share is in the best interests of the company and on the process to be followed.
For more information contact: Don Bethune, Chairman, WEL Energy Trust, telephone 847 6144 (work) 07 847 9817 (home); or John Skinner, Executive Officer, telephone 07 838 0093 or 021 997 702
MEDIA RELEASE FROM WEL ENERGY TRUST