Edison overhaul sees Contact love-in

Nick Stride

Friday 19th December 2003

Eyebrows were raised this week as peace broke out suddenly between Contact Energy and its long-time foe, the New Zealand Shareholders Association.

In an announcement that bore all the hallmarks of a public relations exercise, Contact chairman Phil Pryke and association chairman Bruce Sheppard took the stage at a press conference to slap each others' backs over the abolition of directors' retirement benefits.

Three directors will get a lump sum in recognition of their service to date, to be invested in Contact shares until they retire.

Board fees are going up, from $45,000 a year to $60,000, and Pryke's fees rise from $80,000 to $120,000.

Analysts said the fanfare was probably prompted by the desire of Contact's majority shareholder, Edison Mission Energy, to avoid any negative publicity while it considers sales of its overseas assets.

Credit Suisse First Boston is advising it on "a range of debt and asset issues."

Contact offers a natural hedge against rising electricity prices.

Major players such as Singapore Power and Hong Kong's Hutchison Whampoa are reported to be interested.

Australia's AGL and Origin Energy are also said to be taking a look although Contact, with a market capitalisation of more than $3 billion, would be a big mouthful for them.

Contact's annual meeting, traditionally a feisty affair, will be held on February 17.

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