Edison to contact all shareholders

By CHRIS DANIELS energy writer

Contact Energy shareholders listen up - it's time for the hard sell from Edison Mission.

The US energy giant has launched its nationwide marketing campaign aimed at convincing 122,500 Contact shareholders that a cheque before Christmas is worth more than hanging on to their shares.

Over the next four weeks, all Contact shareholders will be encouraged, via mailouts, advertising, websites and toll-free phone numbers, to sign on the dotted line and sell to Edison.

If they sell, they will get $4.25 a share, made up of an 11 cent per share dividend and $4.14 a share from Edison. The offer, increased last week from the original proposal of $3.85 a share, has been endorsed by Contact directors.

Edison, which already owns 51 per cent of Contact, hopes this new price will prove more popular, and the present market price of the shares - closing down 1c yesterday at $ 4.17 - suggests it has found favour with investors.

"This is a massive undertaking, this is the largest group of shareholders in a single company in New Zealand,"said Edison Mission Asia Pacific senior vice-president Bob Driscoll.

All shareholders should receive a mailout by the end of this week. It contains the formal offer from Edison, a brochure about the company stressing "Our Commitment to New Zealand" and a report from the independent Contact directors advising shareholders to take up the offer.

Should the takeover be successful, the former state-owned enterprise will be removed from the share market.

Edison's mission is to convince all shareholders within four weeks to sell their shares.

"We've got a fairly aggressive campaign," said Mr Driscoll. "I don't think there will be any shareholders who will not be aware of the offer."

Shareholders who had not responded to the offer would be contacted, he said.

An Edison spokesman said there were now 122,500 Contact shareholders, down from the 125,000 that held shares when the takeover bid was launched in early October.

Retail investors have been selling the shares to largely institutional buyers, hoping to make some money.

In 1999, the largest group of shareholders in Contact held around 800 shares apiece, said Mr Driscoll.

Once Edison gets 90 per cent of all shareholders signing on the dotted line, it can begin the process of compulsory acquisition.

These shareholders will still get the dividend cheque of 11c a share from Contact and the $4.14 a share from Edison Mission.

Contact shareholders on the register as at November 16 will be sent an 11c per share dividend by Contact by November 23.

Edison will then send $4.14 a share to each shareholder within seven days of the offer becoming unconditional - December 13.

* Contact shareholders can freephone 0800 651-651 or visit the website.

Edison Mission