Eastern Bay Energy Trust declares Horizon takeover unconditional

Tuesday 30th June 2015

Eastern Bay Energy Trust, the Bay of Plenty lines company, has declared its takeover of Horizon Energy unconditional after crossing the 90 percent threshold needed to mop up the remaining shares.

The lines company controls 91.2 percent of Horizon after Marlborough Lines followed through on its pre-bid agreement to sell its shares, Horizon said in a statement. Eastern Bay Energy Trust offered to pay $4.41 a share for control of Horizon as part of a broader agreement for Marlborough Lines' stake.

"Horizon Energy expects that EBET will compulsorily acquire any remaining shares in Horizon Energy that EBET does not acquire under the offer in accordance with the compulsory acquisition provisions of the Takeovers Code," Horizon said.

Horizon's board recommended shareholders accept the offer, which independent adviser Simmons Corporate Finance said was marginally below the midpoint of its valuation range of between $4.08 and $4.84 per share.

The takeover bid allows for Horizon to declare a final dividend to shareholders.

The company's shares last traded at $4.35.

Horizon, which distributes power to around 24,000 consumers in the Eastern Bay of Plenty, reported a net profit of $4.1 million for the year ended Mar.31 2015, down from $7.2 million the year before which included one off gains.

In September last year Horizon reached an out of court settlement with the Commerce Commission for unintentionally earning 3 percent more than its price path allowed in 2011/2012.

Electricity distributors are restricted in the amount they can earn in any given year under the price path and the settlement agreement means it has to reduce its future earnings in the 2015/2016 year by at least $727,934 to compensate for the overcharging.

BusinessDesk.co.nz

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