Buller Electricity to team up with Pioneer Generation in Pulse takeover bid
By Paul McBeth
Sept. 18 (BusinessDesk) - Lines companies Buller Electricity and Pioneer Generation plan to mount a takeover of electricity retailer Pulse Energy, though haven't settled on an offer price yet.
Pulse Energy was told by its 56 percent shareholder Buller Electricity that the West Coast-based lines company will team up with Otago-based Pioneer to buy the remaining Pulse shares in a formal takeover, the NZAX-listed company said in a statement before its annual meeting today.
The non-binding agreement is subject to due diligence and would see the Pulse business poured into a limited partnership 51 percent owned by Pioneer if it's successful.
"At this time, it is unclear precisely when a takeover notice will be given to Pulse. It is also possible that no takeover notice will be given or no offer made," the company said in a statement. "Pulse recommends shareholders considering dealing in Pulse's securities seek their own independent professional advice."
Last week, Pulse said Buller was considering a takeover and formed a committee of independent directors, chaired by Trevor Janes, to consider the potential deal.
Pulse ceded a controlling stake to Buller Electricity in 2011 to repay debt and provide capital for expansion after the minnow retailer ran out of cash and leaned on the shareholder to get it through. Buller Electricity is the local lines network company on the West Coast of the South Island. It reported an annual profit of $328,000 in the year to March 31, on operating revenue of $110 million, according to its 2015 annual report.
Central Lakes Trust, the owner of Pioneer, reported a surplus of $23.3 million in the 2015 year on income of $86.6 million, and valued its non-current investments at $160.4 million and property, plant and equipment at $116.4 million as at March 31.
Pulse's shares last traded at 8 cents, valuing the company at $26.8 million.