Mighty River Power share offer opens today

The Mighty River Power share offer opens for business today with New Zealanders having three weeks to apply to buy shares.

Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall today confirmed that the share offer will proceed, with Mighty River Power expected to be listed on the stock exchange for the first time on May 10.

“New Zealanders can, from tomorrow, apply to buy shares,” Mr English says. “It is pleasing to have reached this stage in the process. We’ve been through an election, we’ve been through the courts, we’ve had a very positive pre-registration process and now it’s time for New Zealanders who are interested in buying shares in Mighty River Power to actually do so.

“It is important that New Zealanders read the offer document as they consider their investment decision. It has been written to ensure it contains all information that prospective investors need to see, and this was confirmed by the Financial Markets Authority on Friday.”

There’s no rush to apply – New Zealanders should consider this opportunity carefully, and they have almost three weeks to do it, Mr Ryall says.

“The general offer that opens tomorrow is for New Zealand retail investors only. This is part of the Government’s commitment to have New Zealanders at the front of the queue for shares, to encourage widespread ownership, and to have at least 85-90 percent New Zealand ownership," Mr Ryall says.

After Mighty River lists, there will be nothing to stop so-called mum-and-dad investors immediately onselling their shares to a local or foreign party, although the government hopes its bonus share scheme for those who hold shares for two years will help.

Labour promises "action"
Another wrinkle: Labour has immediately muddied the waters. The party says it will reform the electricity sector if it wins power at the 2014 election - a reminder to potential investors that Mighty River operates in a heavily regulated market that has been subject to several waves of reform. Sunday, leader David Shearer said power prices had been rising too fast compared to those of NZ's major trading partners. 

"The pressure on prices will only get worse as this Government sells our power companies to mostly foreign and corporate buyers. Those investors will want to push prices up even more to boost their returns," Mr Shearer said.

"That’s not fair. That’s why Labour will take action."

He did not specify what that action might entail.