BG Group (British Gas), the bidder for majority ownership of Contact Energy, expects to make an announcement soon about Contact, in conjunction with the Takeovers Panel, after receiving a ruling yesterday.
Contact, which has total equity of $3 billion, owns the Clyde and Roxburgh hydro dams, on the Clutha River, as well as the Poihipi Rd, Wairakei and Ohaaki geothermal stations, the Te Rapa co-generation plant and the Otahuhu A and B plants.
With the announcement this week that it was buying back the national rail and ferry assets from Toll Group, the Government will need to consider what to do about energy.
Britain's BG is launching a $A12.9 billion ($NZ15.95 billion) takeover bid for Origin, Australia's second-biggest electricity and gas retailer and 51% owner of Contact.
Questions have been raised about what BG Group planned to do with Origin's stake in Contact Energy, with some analysts expecting a sale.
A purchase of Origin's 51% stake would automatically trigger a full takeover of New Zealand's second-largest listed company.
Analysts were almost universal in agreeing BG, a giant liquefied natural gas operator valued at $US86.5 billion ($NZ113.48 billion), was only interested in Origin's gas and coal seam assets and had little or no interest in Contact.
BG's bid was subject to approval from Australian regulators, as well as from Energy Minister David Parker, the Takeovers Panel and the Overseas Investment Office.
"BG has made a confidential submission to the New Zealand panel [Takeovers Panel]. BG Group notes that it received a ruling yesterday from the New Zealand panel concerning Contact Energy Ltd, which will be the subject of a separate announcement to be agreed with the New Zealand panel," BG Group said to the Australian stock exchange.
The Government has set the benchmark by preventing the Canada Pension Plan from buying a controlling stake in Auckland International Airport because it was deemed a strategic asset.
A change in legislation made it too hard for CPP, which walked away, leaving the airport company shares to fall from their $3.30 spike this time last year to the current $2.20.
Contact shares rose to $10.17 on the announcement of the BG offer but have since come back to $9.07.
A complicating factor in the bid for Origin is a clause in the contract which indicates that the whole takeover bid hinges on BG getting "certain regulatory approvals" from, including others, the New Zealand Takeovers Panel for the 51% stake in Contact.
Analysts were unsure whether that meant the whole deal would collapse if New Zealand regulatory approval was not forthcoming.
In theory, because Origin already owns 51%, BG could reasonably expect to inherit that stake without a hitch.
However, Origin secured its stake in Contact before the Government changed the rules.
If the Government was concerned about CPP having a 40% stake in Auckland Airport, it will probably be unhappy at the prospect of a British-based company having a 51% stake.
If it is unhappy, will it spend $1.5 billion buying that stake, along the lines of what it did for Air New Zealand?
