Contact to purchase Rockgas LPG business

6 March 2007

Contact to purchase Rockgas LPG business

Contact Energy today announced it will purchase the Rockgas LPG business from Origin Energy for approximately $156 million.

Mr Baldwin said the decision to purchase Rockgas gives Contact a unique platform in New Zealand’s energy markets and provides strong growth opportunities for Rockgas through Contact’s large customer base.

Rockgas currently supplies bottled and reticulated LPG, and automotive product, to around 300 bulk industrial clients, 7,000 commercial customers and over 17,000 domestic customers. Rockgas employs around 150 staff and sells around 90,000 tonnes of LPG per annum.

“We have been attracted to Rockgas for some time as a logical way through which to broaden our business and the offers that we can take to existing and new customers,” said Mr Baldwin.

“There are synergies between Contact and Rockgas which will provide strong growth opportunities for both companies,” he said.

“Through Contact’s acquisition of Rockgas we will be able to supply not only electricity and reticulated natural gas, but LPG for those homes and businesses which are not connected to gas networks, or wish to use LPG to manage peak energy demands,” said Mr Baldwin.

Mr Baldwin said the purchase of Rockgas is indicative of the direction Contact is pursuing regarding opportunities to grow the business and strengthen Contact’s position as New Zealand’s leading energy company.

“Rockgas is a business which is performing well. Contact will invest in Rockgas to ensure its continued growth and I am very confident this acquisition will deliver sustained value for Contact’s shareholders over coming years.”

Mr Baldwin said that with the purchase of Rockgas from Contact’s majority shareholder, it was important that a fully independent sale process was conducted.

The process was led by Contact’s Independent Directors’ Committee and an independent appraisal of the acquisition price was commissioned from PricewaterhouseCoopers.

PricewaterhouseCoopers concluded that the acquisition price was fair, both having regard to the underlying value of the business and the value which could be added by Contact, and when compared with the trading multiples of similar comparable companies.

The Rockgas acquisition is conditional on approval under the Overseas Investment Act, and is expected to be complete within this financial year.

ENDS

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