Horizon Energy shares soar on Eastern Bay takeover move

Shares in Horizon Energy spiked more than 27 per cent yesterday on news of a potential takeover offer - the second within the past six months.

The energy distribution company, which helps provide power for 23,000 residents and businesses in the eastern Bay of Plenty, was told by its 77.3 per cent shareholder, Eastern Bay Energy Trust, of plans to buy the rest of the company.

The potential offer comes just months after Horizon's directors recommended shareholders turn down an offer by Marlborough Lines to buy 51 per cent for $3.96 per share because they said it was too low.

The trust said it intended to offer $4 per share for the remaining 22.7 per cent but would first need to receive 50 per cent approval from its customers. But the notice of intention was enough to push the share price up 85c to close at $3.90.

Eastern Bay Energy Trust chairman David Bulley said the trust wanted to buy the rest of the company to secure local ownership.

"We have a firm view that the local headquarters and local jobs be retained and this cannot be guaranteed if there is not local control."

Bulley said he was confident of getting consumer approval for the offer to go ahead and expected to make the official offer to Horizon's 2900 minority shareholders by February 12.

If successful the bid would see Horizon de-listed from the stock exchange.

Bulley said it saw the company as a good investment given its low-risk nature.

"Having come through the turmoil of the last 18 months - we thought - where better to have the money? Being on the regulated side of the business will give us a safe return and hopefully some upside on contestable contracts," he said.

Horizon Energy chairman Rob Tait said the potential offer had not come as a surprise and it would now be seeking an independent report so directors could make a recommendation to shareholders.

A report on the first bid valued the shares in a range of $3.96 to $4.68, putting the first offer at the low-end.

But Tait said the potential success of the new offer could not be judged on the failure of the previous bid.

Tait said a stumbling block for the previous offer was that directors were concerned if the 51 per cent stake was taken the share price would plummet leaving shareholders with an asset that was worth much less.

The offer period is expected to open on February 13 and close on March 15.