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Champagne flows after Contact buy

Friday 7th July 2000

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Contact Energy's $23 million purchase of power marketer Empower has made wealthy men of at least four of the company's investors.

The largest shareholder in Empower was Netco, set up in 1997 by three former executives of Eric Watson's Blue Star Group, Grant Baker, Shane McKillen and Dave Spicer.

Netco owned 62%. Ignoring debt, the sale will net Mr Baker $7.56 million, Mr McKillen $5.28 million, and Mr Spicer $1.43 million. A founding Empower investor, Andrew Hawken, is estimated to have banked $3.68 million. Mr Baker, a former Telecom employee, was a director of Blue Star Group and chief executive of the office products division.

Five Empower employees - Messrs Baker, Spicer and McKillen along with Paul Smithies and Steven Sinclair - have contracts with Contact to continue managing the business.

If net growth in customer numbers meets performance targets in future years the price Contact will pay will escalate, meaning greater riches for Empower's former shareholders.

But they will have a tougher job than before. The large power retailers had been busy managing their own customer bases, Mr Baker said.

More recently companies such as Trustpower had begun marketing energy in Auckland area.

- Nick Stride

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