End nears for Edison offer

By Nick Stride

Friday 1st February 2002

Edison Mission Energy's $4.14 offer for Contact Energy is set to expire unsuccessfully on Sunday as big institutional holders hang on to their shares.

Sharebrokers yesterday reported a late rush of acceptances from Contact's army of small shareholders but Edison's offer is conditional on gaining 90% and is likely to fall well short.

Contact's institutional holders argue the bid is too low despite early indications last year's winter earnings bonanza from low lake levels and high wholesale electricity prices won't be repeated. Edison's hands are now effectively tied as it has passed the deadline for lifting its bid.

Two independent valuation reports have valued Contact at $4.11 to $4.51 and at $4.22 to $4.66 and some sharebroking analysts value the company still higher, at up to $6 a share.

Edison paid $5 a share for a 40% stake when Contact was privatised and floated in 1999. The last notice Edison filed showed it had only 55.6%.

Comments from our readers

No comments yet