Dual Listed Companies Merger Terminated
28 June 2006
Contact Energy And Origin Energy Agree To Terminate Dual Listed Companies Merger Implementation Agreement
Contact Energy and Origin Energy have today announced that they have agreed to terminate the Merger Implementation Agreement entered into between Contact Energy and Origin Energy on 20 February 2006.
The Contact Energy Independent Directors and Origin Energy Board believe that the terms of the proposed merger appropriately reflect the relative value of both companies and that the merger would create value for both sets of shareholders.
However, the Origin Energy Directors have determined that there is not sufficient support from key shareholders of Contact Energy for the merger proposal to be approved under the current terms. Origin Energy has also determined that they are not prepared to improve the terms of the proposal in favour of Contact Energy Minority Shareholders as that would not be in the best interests of Origin Energy Shareholders.
“In the absence of an improvement in the merger terms for Contact Energy Minority Shareholders the Independent Directors assess that there is insufficient assurance of the merger proposal being successfully executed in an acceptable timeframe,” said Phil Pryke, Chairman of the Independent Directors.
Given this, and the significant costs associated with putting the matter before shareholders, the Independent Directors have concluded that proceeding would not be in the interests of Contact Energy Minority Shareholders.”
Contact Energy and Origin Energy had previously advised that they had obtained or were confident of obtaining all regulatory approvals necessary to conclude the merger and that the merger proposal as set out in the Merger Implementation Agreement was capable of being implemented.
“Regulatory issues were not a factor in the decision not to proceed with the merger,” said Phil Pryke.
“While the merger will not proceed, the challenges facing Contact Energy have not changed. The Company will continue to manage these challenges in the best interests of shareholders, “ said David Baldwin, Chief Executive of Contact Energy.