Daily ShareChat: Energy Developments

By Jenny Ruth

Thursday 21st January 2010

Shareholders in Energy Developments should now accept Greenspark's $A2.75 ($NZ3.44) a share takeover offer although they should wait until as close as possible to the offer close date to do so, says Aegis Equities Research analyst Peter Rae.

"We note the Energy Developments board has not changed its "reject offer" recommendation," Rae says.

Previously, Rae had held a neutral view on the offer but now Greenspark has secured nearly 53% (as of January 15), if it fails to get to 90% then shareholders who don't accept could be locked in as minority interests, he says.

One key to the success of Greenspark's offer was that Infratil backed it and last week sold its 32.47% stake in Energy Developments for $A139.9 million into the offer.

"We think it unlikely a higher offer will emerge, given the company has effectively been up for sale for some time." In the absence of a higher offer, the share price is likely to fall below $A2.75, he says.

Greenspark's offer is set to close on January 22. Greenspark has said it has no intention of making a follow-on takeover offer after the current offer closes but it reserves the right to review its position after 12 months.

BROKER CALL: Aegis Equities Research recommendation on Energy Developments is accept offer.

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