KEY POINTS:
A small energy trust is standing firm against Todd Energy, owned by New Zealand's richest family, as it fights to retain a say in the way its local energy company is managed.
The King Country Electric Power Trust says it will not sell its 10 per cent stake
in generator-retailer King Country Energy to Todd Energy which is offering $5 a share to gain 50.1 per cent control.
Instead, the trust plans to double its King Country Energy stake.
Chairman Brian Gurney said the trust was conducting an ownership review among its beneficiaries - mainly electricity users in the southern King Country area - to gauge support for the plan.
Should it get backing, Gurney said it was "very unlikely" the trust would offer less than Todd Energy to secure a further 10 per cent.
It would finance the purchase by selling some of its 25 per cent stake in the local lines company.
The trust believed that by doubling its stake in King Country Energy, it would be able to influence the company's future and keep it as a largely community focused business.
King Country Energy's independent directors have recommended that shareholders do not accept Todd Energy's offer.
They say that although it is within the $4.77 to $5.24 a share valuation determined by independent valuer Grant Samuel, it is too low and would give Todd control for an insufficient premium.
Todd Energy chief executive Richard Tweedie said his company could make a difference to the direction and leadership of King Country Energy.
"We provide quite a few services to it now in selling and buying electricity on the wholesale market and we've supported it for a number of years."
Tweedie said Todd's offer, which was recently increased from $4.40, was in the middle of the independent valuation range, higher than an ABN Amro valuation last year and was "as good as anyone's ever going to get".
Tweedie said the Grant Samuel valuation was made on the assumption that a new hydro plant at Mokau, which would make King Country Energy 75 per cent self-sufficient, was likely to go ahead.
But that was by no means assured, as the initial consent application had been rejected by the regional council.
"If that project doesn't go ahead we've paid too much for the business," Tweedie said.
King Country Energy's shares, which are traded on the Unlisted market last changed hands at $4.80.
King Country Energy
* 19,000 retail customers
* Sells 220 GWH (gigawatt hours) of power annually of which it generates 55 per cent itself in four small hydro electric stations.
* Posted a full year net profit of $3.87 million last year.
* Has a market cap of $90 million.
* Is 35 per cent owned by Todd Energy, 10 per cent by the King Country Electric Power Trust and 8 per cent by the Waitomo Energy Services Trust.
