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Marlborough Lines seeks to lift Horizon stake

Wednesday 30th June 2010

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Marlborough Lines is resuming its investment into Horizon Energy Distribution, offering to buy enough shares to lift its holding to 15% from 10.1%.

First NZ Capital will seek to acquire up to 1.2 million shares in Horizon at $4.06 apiece, a 1.5% premium to their trading price yesterday. The NZX has established a so-called special order facility with a temporary code of HEDY for shares sold to the brokerage. The SOF starts at the open of trading today and will close at 5 pm on July 16.

Marlborough’s foray into Horizon has put it at odds with the utility’s major shareholder, Eastern Bay Energy Trust with 77.3%, which had urged minority shareholders to ignore the offer. Marlborough paid $4.15 for its initial stake, which included an impending dividend payment. The shares traded at $4 yesterday.

The South Island company initially sought 50.1% of Horizon last September at $3.96 a share, prompting a counter-bid from EBET at $4 - an effort that failed when a Bay of Plenty Maori trust challenged the quality of Horizon's disclosures in takeover documents.

A subsequent Takeovers Panel investigation, sought by Marlborough Lines, found Horizon breached the Takeovers Code by failing to identify the impact of accounting treatment changes on revised profit forecasts. Marlborough already owns 50% of Nelson Electricity and 51% of Otago Net, also both local electricity monopoly networks.

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