Rainfall no rescuer for Edison's Contact bid

Friday 25th January 2002

Summer rain has done nothing to help Edison Mission Energy's chances of securing Contact Energy, analysts said yesterday.

Despite talk Contact's institutional and "mum & dad" shareholders would reappraise Edison's $4.14 a share offer, analysts said there was little chance Edison would reach by February 3 the 90% shareholding on which the offer is conditional.

It last disclosed a 53% holding, on January 18. The theory was that higher lake levels and lower wholesale electricity prices would make Edison's offer seem more attractive. "But the lakes are no higher than they were at this time last year," ABN Amro analyst James Miller said.

Edison last Friday missed the deadline to lift its offer. Nor can it drop the 90% condition without permission from the Takeovers Panel. Analysts said the panel wouldn't want to create that precedent.

Its final card, if it is not to let the bid lapse, would be to offer a substantial final dividend of, perhaps, 30c.

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