Thursday 17th June 2010
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Marlborough Lines' stand in the market for up to 10.1% of the shares of Horizon Energy Distribution is close to reaching its goal, with the company declaring this afternoon it holds 9.24% of the company.
First NZ Capital has been acting on instruction from the Blenheim-based, community-owned electricity network since Monday, buying shares at $4.15, despite a plea from Horizon's 77.3% owner, Eastern Bay Energy Trust, to ignore the offer, which it says is really only $4.06 when an impending dividend is stripped out. The shares fell 2.4% to $4.06 in trading today.
Marlborough made an initial bid for 50.1% of Horizon last September at $3.96 a share, prompting a counter-bid from EBET at $4 - an effort that failed when a Bay of Plenty Maori trust challenged the quality of Horizon's disclosures in takeover documents.
A subsequent Takeovers Panel investigation, sought by Marlborough Lines, found Horizon breached the Takeovers Code by failing to identify the impact of accounting treatment changes on revised profit forecasts.
EBET believes Horizon should remain locally owned, and complained this week that Marlborough's 10% stand was a "spoiler" bid that would prevent the trust from pursuing 100% ownership of the Whakatane-based, NZX-listed local electricity network.
EBET has been unable to pursue that aim since the High Court proceedings that stopped its takeover bid also uncovered questions about whether the trust was already in breach of its Trust Deed by owning more than 25% of Horizon.
EBET deputy chairman Kevin Hennessy said this week there was "no way" Marlborough would be invited onto the Horizon board, even with a 10% shareholding. Marlborough says its interest in Horizon arose from discussions that Horizon initiated in the first place.
Marlborough already owns 50% of Nelson Electricity and 51% of Otago Net, also both local electricity monopoly networks.
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