Prime Infrastructure agreed to sell down Powerco shares before making takeover offer

 

21 September 2004

Prime Infrastructure Management Limited (PIML) and Babcock & Brown Investor Services Limited are parties to a lock-up agreement with the majority shareholders of Powerco Limited.

The majority shareholders are New Plymouth District Council, Taranaki Energy Trust and Powerco Wanganui Trust.

Under the lock-up PIML, through its subsidiary Prime Infrastructure Networks (N.Z.) Limited (Prime New Zealand) is to make a takeover offer to all the shareholders of Powerco. Formal notice of that takeover was given on 20 September.

On 15 September 2004 PIML filed a substantial security holder notice disclosing that since 1 September its subsidiary Prime Infrastructure Networks (Australia) Pty Limited (Prime Australia) had purchased just over 1% of the voting securities of Powerco through on-market trading.

The Takeovers Panel considers that this acquisition of voting securities may not have been made in compliance with the Code. As a result of the lock-up agreement the Panel considers that PIML and Babcock & Brown may be associates of the majority shareholders, in which event it was not open to Prime Australia to acquire shares as the majority shareholders already hold in excess of 20% of the voting rights in Powerco (in fact 53.6%).

While PIML does not accept that the lock-up agreement makes it an associate of the majority shareholders, it wishes to proceed with the takeover offer for Powerco at the earliest possible time and wishes to avoid the delay which would be caused by having the matter formally determined by the Panel. Accordingly PIML has sold the recently acquired Powerco shares to non-associated parties.