Meridian float ad bill to top $2.2m

Meridian Energy Te Apiti Wind Farm on the Ruahine Ranges between Woodville and Ashurst, New Zealand. Photo / NZPA

The Government and Meridian Energy are to jointly spend $2.2 million on advertising in a bid to convince investors to get on board its sharemarket float.

The five week campaign kicked off on Monday ahead of its prospectus launch tomorrow. The costs are lower than that of Mighty River Power but cover a shorter period.

Mighty River's advertising campaign cost $2.26 million and spanned six weeks. Of that $1.1 million was spent on a three week pre-registration campaign.

More than 440,000 pre-registered but only 113,000 people ended up buying shares in the $1.7 billion float. The remainder was spent during the offer period itself.

Meridian Energy's sale process did not include pre-registration.

State-owned enterprise minister Tony Ryall said advertising spend for the two floats was comparable.

A report on total costs associated with the Government's mixed ownership model shows it cost just under $41 million to list Mighty River Power on the sharemarket.

Of that the Government paid $28 million and Mighty River shelled out $12.8 million.

Total spending for the programme hit $58.9 million as of June 30 of which $41.1 million was paid by the Treasury and $17.8 million was paid by the four energy companies.

That does not include the $30 million sweetener the Government agreed to pay to New Zealand Aluminium Smelters to help seal contract negotiations for the Tiwai Point smelter in August.

The deal was seen as essential in preparing the way for Meridian Energy's sharemarket float.

The Government initially said it hoped to raise between $5 billion and $7 billion from the mixed ownership model programme but this week Prime Minister John Key said it was more likely to be closer to $5 billion.

Meridian Energy is expected to list on October 29.

How much energy companies have spent preparing for share market floats (to June 30)

Mighty River Power $12.828m

Meridian Energy $3.484m

Genesis $1.344m

Solid Energy $0.172m