Horizon Energy Takeover offer

The Eastern Bay Energy Trust has announced its intention to make a full takeover offer for all the shares in Horizon Energy Distribution Limited that it does not already own.  The Trust currently holds 77.3% of the shares in Horizon, which is listed on the NZSX.

To view the Takeover Notice, including a draft of the proposed takeover offer, click here.

Why does the Trust want to increase its ownership to 100%?

The recent offer by Marlborough Lines Limited for 51% of the Horizon shares highlighted how vulnerable our local electricity lines business is to this type of unsolicited action.

To protect Horizon Energy for the future of the Eastern Bay of Plenty power consumers, the trustees of the Eastern Bay Energy Trust believe it is in the best interests of both Horizon and its beneficiaries for the Trust to purchase the remaining shares in Horizon that it does not already own. The trustees have made this decision for the following reasons:

Our local power lines network is a strategic local infrastructure asset and it is important to the Eastern Bay of Plenty that ownership and control remain local.

It is important to protect local jobs rather than having jobs and control go outside the area.

It is important to ensure the profits generated by Horizon are able to be reinvested in the Eastern Bay of Plenty.

Having full control will stop unsolicited takeover offers for Horizon occuring. Dealing with these offers is very costly and takes valuable time, resulting in the focus being taken away from running the business.

Horizon Energy is currently listed on the New Zealand Stock Exchange. If the Eastern Bay Energy Trust is successful in buying the remaining shares, Horizon can be delisted, resulting in significant annual cost savings.

Will the Trust make changes to the way Horizon is operated?

If the takeover offer is successful the trustees have no plans to make any changes to the way Horizon is operated. The trustees have full confidence in the expertise, experience and integrity of the current directors. The company will continue under the governance of its existing board, and the current management structure will not be altered.

What will the takeover offer cost the Trust?

The trustees have announced their intention to make an offer of $4 per share for the 5,675,255 shares that they don't already own on behalf of consumers. If all the shares currently held by other shareholders are acquired, the purchase of these shares will cost the trustees $22,701,020. The trustees have the necessary funding in place.

Will the Trust be able to continue funding community projects?

The purchase of the additional Horizon shares will not impact on the ability of the trustees to continue to make distributions for energy related purposes in the Eastern Bay of Plenty community, as they have done in the past. The trustees are currently finalising their 2010/11 Annual Plan and this will be available to all consumer beneficiaries in March 2010.

To date the Eastern Bay Energy Trust has paid out a total of $23.8 million in distributions for energy related purposes.

Consumer poll

To enable it to proceed with this takeover offer, the Trust is required to seek the approval of its consumer beneficiaries. The Trust Deed requires that more than 50% of the consumers responding to a postal questionnaire approve the acquisition of additional Horizon shares before the Trust can proceed.

Voting packs will be delivered to consumers of electricity within the Eastern Bay Energy Trust district from Wednesday 13 January 2010. Voting closes at 12 noon on Friday 5 February 2010. For more information, see Consumer Poll 2010 page.

 

Frequently asked questions and answers

To hear recorded Radio 1XX interviews based on frequently asked questions and answers, click here and here.

 

'Energising our community'.

 

 

VISION

Eastern Bay of Plenty:- a community energising its own future