After seeing off the Canada Pension Plan from its planned 40% stake in Auckland International Airport, the Government may need to consider whether energy generator Contact Energy, already 51% owned by Australia's Origin Energy, can pass into British hands.
Origin, Australia's second largest electricity and gas retailer, received an $A12.9 billion ($NZ15.7 billion) takeover proposal from United Kingdom-based utility BG Group (British Gas).
There was confusion in the New Zealand market as to whether a successful takeover by BG would automatically trigger a full takeover bid of Contact under the Takeovers Code.
Contact shares jumped 9% to a record $10.15 on the prospect of a bid for the New Zealand Contact, but later retreated to close at $9.70, up 3.4%. It traded as ow as $9.20 before the bid.
Origin shares had soared 36% in price by 5pm.
On Monday, Vector sold its Wellington network to Hong Kong-based Cheung Kong Infrastructure Holdings. The Government indicated it was not likely to intervene because the network was not on sensitive land.
ABN Amro Craigs broker Chris Timms said there should have been no surprise in the markets that transtasman infrastructure assets looked attractive buying to international investors.
There had been so little recent company activity that markets were not expecting the bid.
‘‘I see it as a ‘land grab', with companies wanting to match long-term debt with long-term assets like infrastructure. Companies like Origin and Contact can increase prices with inflation.
‘‘We have seen markets in disarray in recent months. That creates opportunities for corporate activity.''
Origin had a solid book of long-term assets - including Contact - which were attractive to BG, Mr Timms said.
‘‘This raises the whole issue of strategic assets. When you look at this, the Government has to consider whether it is an Auckland Airport or Vector situation. I think it sits more on the Auckland Airport side than Vector.''
In Otago, Contact owned the Clyde and Roxburgh hydro dams.
Mr Timms said BG would look at the Origin assets over a 10-year to 15-year time frame rather than the five years usually considered by retail investors.
Origin Energy was a popular share with ABN clients, he said.
The BG bid for Origin was at a 40% premium to yesterday's opening share price.
Two months ago, BG paid $A664 million for 10% of coal seam gas producer Queensland Gas Co and the two planned to build an $A billion liquefied natural gas (LNG) plant near the Queensland port of Gladstone.
It would have capacity of three to four million tonnes a year. Analysts said Origin's extensive coal seam methane assets in Queensland could provide gas for a second plant.
BG, valued at around $US86.5 billion ($NZ113 billion), is one of the world's most active LNG traders and has long voiced the goal of expanding its position in the Pacific Basin where LNG demand has been forecast to grow strongly.
