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Contact to buy Rockgas LPG business

By NZPA

Tuesday 6th March 2007

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Contact Energy is to buy the Rockgas LPG (liquefied petroleum gas) business from Contact's 51% shareholder Origin Energy for about $156 million.

Contact chief executive David Baldwin said that with the purchase of Rockgas being from Contact's majority shareholder, it was important that the sales process was fully independent.

The process was led by Contact's independent directors' committee, with an independent appraisal of the acquisition price being commissioned from PricewaterhouseCoopers, Baldwin said.

PricewaterhouseCoopers concluded that the acquisition price was fair, regarding both the underlying value of the business and the value which could be added by Contact, and when compared with the trading multiples of similar comparable companies.

The move gave Contact a unique platform in New Zealand's energy markets and provided strong growth opportunities for Rockgas through Contact's large customer base, he said.

"We have been attracted to Rockgas for some time as a logical way through which to broaden our business and the offers that we can take to existing and new customers," Baldwin said.

Rockgas supplies bottled and reticulated LPG, and automotive product, to around 300 bulk industrial clients, 7000 commercial customers and more than 17,000 domestic customers. It employs around 150 staff and sells around 90,000 tonnes of LPG a year.

The Rockgas acquisition was conditional on approval under the Overseas Investment Act, and was expected to be finished within this financial year.

Contact Energy shares were down 2c around 11am today to $8.82, as the New Zealand sharemarket's benchmark index dropped 0.6% in the first hour after opening.

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