Edison offers $3.85 per share for Contact

By Phil Boeyen, ShareChat Business News Editor

Friday 12th October 2001

Contact Energy's (NZSE: CEN) cornerstone shareholder, Edison Mission Energy, has made a takeover offer for the rest of the company.

Contact Energy says it has an offer under the Takeovers Code from EME subsidiary, Mission Energy Five Star Holdings, for the remainder of the Contact shares not already held or controlled by EME and its wholly owned subsidiaries.

The offer price is $3.85 per share, an 11.5% premium to Contact's Thursday's closing price of $3.45 per share.

Contact says the offer will be dated 31 October and will remain until the end of November, with the offer price to be paid in cash.

The takeover offer price from Edison is a considerable discount to the $5.00 per share the company paid when it bought its 40% stake in the state-owned energy company in 1999 for $1.208 billion.

However for founder shareholders, many of whom were 'mum and dad' investors, it is a higher price than the $3.10 issue price.

It is also higher than the $3.10 Edison Mission paid in a market stand earlier this year which took its shareholding from 40% to 51.2%.

Notice of Friday's takeover offer is being made before the company has released details of its full-year results for the year ended September.

Contact has been tipped by the market to be in a position to deliver a sound result after a cold, dry winter which pushed other energy retailers to the wall but will have benefited companies like Contact with a solid generation base.

The company's share price has been rising in recent months on the strength of a good full-year result and as investors looked for safe, dividend-yielding stocks in light of the US terrorist attacks and lower interest rates.

For the six months ended March the company made a $35.65 million compared with last year's $38.2 million.

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