Sharechat Logo

UPDATE: Trustpower targets King Country retail business

Thursday 7th December 2017

Text too small?

(Recasts and adds detail from takeover offer)

Trustpower is eyeing up King Country Energy's retail business, as it teams up with King Country Electric Power Trust to buy out the remaining minority shareholders. 

The Tauranga-based utility company will form an unincorporated joint venture with the trust, which owns 19.98 percent of King Country Energy, which will then make a takeover offer for the central North Island electricity generator and retailer, it said in a statement. The $5 a share offer is a premium to the $4.50 the shares last traded at on the Unlisted exchange before being halted on Dec. 3. 

Trustpower and the trust plan to delist King Country Energy from Unlisted, install their own board, and assess whether the North Island power company should sell its retail business, the notice of takeover says. 

The deal will see Trustpower, via a holding company, pay for all shares acquired by the joint venture, while the trust will pay for the new entity to acquire its own shares. If they get over the 90 percent threshold to trigger mop-up provisions, Trustpower's holding company will assess whether the King Country retail business should be sold. Provided that decision comes within six months of the takeover being completed, it will enter into a sale and purchase agreement with Trustpower. 

Trustpower first mounted a takeover for King Country Energy in 2015, using a two-tier pricing scheme offering $5 per share if it reached at least 70.2 percent, or $4.78 if it fell short of that mark. It ultimately attracted a 65 percent stake, including Todd Corp's Nova Energy holding.  

King Country Electric Power Trust rejected Trustpower's offer in 2015, saying at the time it saw the holding as a cornerstone investment and regarded Trustpower as an "excellent partner" for the power company. Earlier this year the trust reviewed its interest and decided to keep it. 

Trustpower shares slipped 0.5 percent to $5.95 and have jumped 26 percent this year, outperforming other electricity generator and retailers on the S&P/NZX 50 index which have gained between 14-and-17 percent. 

King Country Energy's board formed an independent committee made up of chair Toby Stevenson, Linda Robertson and Brian Needham to consider the offer. It's applied to the Takeovers' Panel to appoint Simmons Corporate Finance to prepare an independent adviser's report, and has hired West Coast Capital as a financial adviser and Harmos Horton Lusk as legal adviser. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares edge up as NZX leads late recovery, Air NZ falls
Twyford extends olive branch to Singapore in house-buying ban
NZ dollar gets late lift from US political news
IRD to get increased powers to extract info from multinationals under new tax law
Sanford still focused on building inhouse innovation capability, premium brand
CricHQ's business and assets to be sold to NZ investors, settlement in January
MPI survives defrag of fisheries, forestry, biosecurity, food safety portfolios
Government to conduct inquiry into September fuel pipeline outage
FX trader faces civil proceedings over lack of anti-money laundering processes
NZ food prices fall 0.1% in November, rise in year on gains for kumara, pumpkin, butter

IRG See IRG research reports