TET Seeks Bids On Powerco Holding

Thursday, 29 April 2004, 9:35 am
Press Release: Taranaki Electricity Trust

The Taranaki Electricity Trust (TET) is seeking indicative bids on its 11.79% shareholding in power distribution company Powerco, following news of merger discussions between Powerco and NGC.

TET’s board met today and voted by majority to commence the sale process of its shares.

Alongside the 38% Powerco holding of New Plymouth District Council, which is also inviting bids, TET’s stake will put potential buyers in a position to control Powerco. In recent examples of such takeover positions, buyers have paid an average premium of around 25% on the market share price prior to the takeover announcement.

Recent examples also suggest that if TET sold its shares after a merger took place, it could have to accept a discount of around 10% on market value.

Chairman Brian Jeffares says that the Taranaki Electricity Trust deliberated for some time following advice received from their financial advisers.

“We have been well served both by Powerco and our advisers and as prudent trustees we have decided to test the market to ascertain a market value,” he says.

“We are certainly dividend driven and uppermost in our minds is the desire to ensure that the level of funding we have been receiving is matched or bettered. By diversifying our portfolio we will be able to spread our investment risk and take advantage of a premium likely to be offered for the substantial number of shares being made available.
”We have enjoyed a fantastic journey with Powerco and we look forward to their progress with much interest.”

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