Vector Announces Agreement Regarding Purchase
Mon, 11 Oct 2004
Vector Announces Agreement To Purchase Major Shareholding In NGC Holdings Limited (NGC)
Vector Chairman Michael Stiassny announced today that the company has reached an agreement to purchase The Australian Gas Light Company's (AGL) 66.05% stake in NGC.
AGL has agreed to sell its majority shareholding to Vector at $3.00 per share - a deal worth NZ$877.4 million in total.
Mr Stiassny says the purchase of a stake in NGC is a major achievement for the company, and is consistent with Vector's long term strategy for growth as an owner and manager of critical infrastructure assets.
"The purchase of a majority shareholding in NGC is an exciting step forward for Vector as it provides the company with a number of complementary businesses for its current portfolio.
NGC is an extremely well managed organisation which is positioned for significant growth in the future. The company has a range of high quality assets which will not only enhance Vector's strategic position, but also continue to play a major role in the country's energy industry."
Completion of the acquisition is subject to an exemption being granted by the Takeovers Panel, which would allow AGL to sell its New Zealand holding company (AGL NZ Limited) to Vector, rather than its NGC shares. This company holds 64.2% of NGC. AGL also directly owns a further 1.8% stake. An offer is expected to be made to NGC's other shareholders in due course on an equivalent basis.
The offer is also conditional on Commerce Commission approval and an exemption under the Electricity Industry Reform Act (EIRA) in regard to NGC's interest in electricity generation.
Mr Stiassny says the deal is also a significant milestone for New Zealand.
"Given recent public debate on foreign ownership, we are pleased to be able to bring another valuable infrastructure asset back under majority New Zealand ownership."
Vector will be holding a media briefing this morning - details will be issued shortly.
The deal - a summary
1. Vector has been chosen by The Australian Gas Light Company as the preferred buyer for its 66.05% stake in NGC Holdings Limited.
2. The agreed price is $3.00 per share (less any dividend paid prior to completion).
3. Under the New Zealand Takeovers Code, Vector is required to make a takeover offer for the full 100% of NGC. It will send out a notice of offer to around 15,000 other NGC shareholders, who collectively hold the remaining 33.95% of NGC, in due course.
4. A takeover notice is expected to be issued to NGC shortly after receiving the Takeovers Code exemption. NGC's independent directors will then commission an independent appraisal of the offer, and will make a recommendation as to whether NGC shareholders should accept the offer or not.
5. The offer will be open for 30 days. NGC's shareholders are free to choose whether they accept Vector's offer or not, by the offer closing date.
6. If Vector achieves a 90% stake, it is likely that the two companies will be merged. If not, they will continue to operate as separate organisations.
1. Vector has arranged funding, including an equity bridge facility with the balance provided by
additional bank financing.
2. In addition, Vector has made a commitment to undertake an initial public offering of an amount equivalent to 24.9% of the company within the next 12 months to repay the equity bridge facility.
1. Approval by the Commerce Commission in respect of the Commerce Act.
2. Exemption under the Electricity Industry Reform Act regarding NGC's interest in electricity generation.
3. Exemption from the Takeovers Panel to allow Vector to directly purchase AGL NZ Ltd, the holding company of the majority of the NGC shares held by AGL.