Edison increases Contact offer

By Phil Boeyen, ShareChat Business News Editor

Friday 2nd November 2001

Edison Mission Energy has raised its offer for Contact Energy (NZSE: CEN) by 40 cents per share although this will be reduced by the final year dividend of 11 cents.

The company's cornerstone shareholder has announced that it will now offer Contact shareholders $4.25 a share to take over the company rather than the $3.85 it first offered.

"We have increased our offer price after discussions with the independent directors of Contact Energy," says EME spokesperson Bob Driscoll.

"The independent directors are recommending Contact shareholders accept our offer and, as current Contact shareholders, will be accepting the offer themselves.

"Our offer is 'fair and reasonable' according to Grant Samuel, the independent advisers to Contact, falling close to the mid-point of their share valuation range."

Grant Samuel's valuation of the company is between $4.11 and $4.51 per share while investment bankers Cameron & Company assess the value at between $4.22 and $4.66 per share.

Mr Driscoll says the new price is $1.15 a share more than people paid when they invested in the initial float in 1999.

"We have taken note of the popularity of Contact's shares since the announcement of our intended offer price as well as the views expressed in the independent advisor's valuation.

"With these in hand, we have determined a final offer price which we believe to be both fair to shareholders and in line with our investment criteria. We believe it to be a valuable offer which will be successful."

The offer date has been set for November 6.

The market has been expecting an increased offer with Contact shares trading above EME's offer price ever since the bid was first made three weeks ago.

At the time the company refused to buy into comments that it was undervaluing the company, claiming it had already paid a control premium when it paid $5.00 for its stake in 1999.

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