Buller Electricity ends lock-up deals in prospective Pulse takeover bid

Tuesday 27th October 2015

Buller Electricity, the West Coast based lines company, has discontinued lock-up agreements with Pulse Energy security holders ahead of a potential takeover bid, saying they should be able to read the independent adviser's report before making a decision.

The lines company, which owns 56 percent of Pulse, expects to send a takeover notice next week, and won't enforce any lock-up agreements it had previously received from the electricity retailer's security holders, Pulse said in a statement. Buller Electricity affirmed its intention to offer 11 cents per share, $1.10 for mandatory convertible notes, and 5 cents per option in the takeover.

"BEL has advised Pulse that on further consideration, BEL believes that all security holders should have the opportunity to review the independent adviser's report prior to making any decision whether to accept BEL's takeover offer," Pulse said. "Pulse recommends that shareholders considering dealing in Pulse's securities prior to any offer being made should seek their own independent professional advice."

Pulse had previously warned its investors that signing a lock-up agreement before the takeover was formally lodged meant they wouldn't be protected by a Takeovers Code compliant offer, and recommended they seek advice before signing up to such a deal.

The electricity retailer ceded a controlling stake to Buller Electricity in 2011 to repay debt and provide capital for expansion after the minnow retailer ran out of cash and leaned on the shareholder to get it through.

Last month, Buller Electricity told Pulse it planned to make a full takeover bid with a third party, which was later identified as Otago-based lines company Pioneer Generation.

Pulse's NZAX listed shares last traded at 10.1 cents, and have gained 44 percent this year.

BusinessDesk.co.nz

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