Edison Mission extends offer period to 3 February

WEDNESDAY 21 NOVEMBER 2001

Edison Mission extends offer period to 3 February

Edison Mission Energy’s (EME’s) offer for Contact Energy shares will now extend to 3 February 2001 – the last possible closing date.

EME Asia Pacific senior vice president Bob Driscoll said the extension recognized the logistical difficulties of reaching 121,000 individual Contact shareholders, and will provide more opportunity for them to evaluate and respond to the offer.

“By law we cannot extend the offer beyond 3 February next year. If we do not achieve 90% of the Contact shareholding by this deadline, the offer will lapse.”

Mr Driscoll noted that there had been considerable speculation about the Edison Mission Energy offer. It is very important to EME and all shareholders that there is as much certainty as possible for Contact’s shareholders, particularly the large number of smaller investors. “Obviously extending for any shorter time ran into the Christmas holiday period, but the major reason we decided to extend for this period is that we did not want any further speculation about any other changes to the offer.

“We want scrutiny of, and interest in, our offer based on the facts.

“For the record:
- the timing is fixed. It cannot go beyond 3 February
- the threshold for acceptances cannot legally be reduced below 90%
- shareholders do not gain anything by waiting. Under the new Takeovers Code, if the offer becomes unconditional all shareholders will get paid the same price, even those whose shares are compulsorily acquired
- our offer price will not be increased. Our offer is a good one, and is fair.”

With regard to price, Mr Driscoll noted that “there has been speculation that we will pay a higher price. We will not.

“Some are also saying that the price of Contact’s shares indicates that the market believes that the offer will fail. I would have thought that a more relevant interpretation for retail holders is that the current share price is an indication that the market does not believe the over-inflated valuations that some brokers have placed on Contact shares.

“We have made our offer and are prepared for Contact’s shareholders to make their assessment of its merits. We have done this mindful of the emphasis the new Takeovers Code places on the rights of small shareholders. We are well aware that every investor has money at stake.“

All shareholders would be posted a letter tomorrow (Thursday) advising them of the change in the offer period, as required by the Takeovers Code. EME has announced this decision now as the code requires any change to the offer to be made at least 14 days prior to its close.

The letter has also reiterated to shareholders that the offer:
- is recommended by Contact’s independent directors, who are accepting it themselves as shareholders
- is recommended by New Zealand’s largest retail brokers, Forsyth Barr
- is ‘fair and reasonable’ according to Grant Samuel, the independent advisers to Contact.

Mr Driscoll said Contact shareholders would receive an interim dividend of 11c per share from Contact on 23 November. “We will now pay them $4.14 per share on top of that when they accept our offer. This represents a total return of nearly 50% on the listing price of $3.10, including dividends paid by Contact since 1999.”

ENDS

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