The Eastern Bay Energy Trust has made a takeover bid for Whakatane-based Horizon Energy, after last year quashing a partial takeover bid by electricity lines company Marlborough Lines.The NZX-listed (HED) company issued a statement today it had received a
The Eastern Bay Energy Trust has made a takeover bid for Whakatane-based Horizon Energy, after last year quashing a partial takeover bid by electricity lines company Marlborough Lines.
The NZX-listed (HED) company issued a statement today it had received a takeover notice for 100% of ordinary shares at $4.00 per share.
The Eastern Bay Energy Trust is already a majority shareholder with a 77.29% stake in Horizon but would only purchase the remaining shares after consumer consultation, it said.
The trust needed more than a 50% positive response from regional beneficiaries and shareholders.
In October last year, Eastern Bay Energy Trust chairman David Bulley said it had decided to reject Marlborough Lines’ offer at $3.96 a share, as it preferred to retain control of “a strategic local asset”.
This morning, he told NBR the trust believed it was important to secure local ownership, given the recent partial takeover offer and the possibility of other offers emerging.
A project last year had resulted in several interested parties and although there was no specific party now, further offers were possible.
“Obviously we are aware of the disturbance to business when there’s a takeover bid – it’s expensive for the trust and the company.”
As a major employer in the district with plans for expanding its contracting business, Horizon Energy had been a consistent focus for the trust, he said.
“Increasing our share ownership has always been there as an option in our strategic planning,” he said.
But he would not say whether the trust had been considering the move before Marlborough Lines’ bid last year.
“I suppose the Marlborough Lines issue would have raised the issue of disturbance to normal business and cost to the company.”
At the time, the trust said it never had a will to sell, despite Marlborough Lines claiming otherwise, leading Horizon to ask the trust to publicly state its intentions.
Local headquarters and local jobs must be retained, which could not be guaranteed without local control, he said.
“The trust’s holding in Horizon has been a very good investment and it is our intention to pay a premium that better reflects the real value of the company than the $3.96 a share offer for 51% made by Marlborough Lines at the end of September.”
Marlborough Lines offer valued the company at $99 million, which fell at the bottom end of an independent advisors report. The Horizon board indicated the offer price did not represent adequate value.
However, Mr Bulley said this morning the trust thought $4.00 was a fair price and it had to be fair to local beneficiaries and shareholders in the region.
The offer is subject to a minimum 90% shareholding condition and will start on February 13, 2010, remaining open until March 15.
Horizon’s independent board of directors will consider the offer and appoint an independent advisor to prepare a report, which will be made publicly available under the Takeovers Code.
Horizon Energy posted a 6.3% decline in net profit of $5.15 million after tax for the year ending March 31 2009.
For the six months to September 30 2009, it reported a net profit after tax of $3.83 million (compared to $3.8 million for the same period in 2008) on revenue of $15.98 million (compared to $17.24 million).
On September 28, 2009 Horizon Energy announced an increased annual profit forecast of $6m.
This morning shares were up 7.87% to $3.29.
