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Less money than expected received from the partial sell-down of Meridian Energy may force the Government to rethink its state-owned assets sales programme.
Air New Zealand could be the next company in which the Government reduces its stake and Genesis could possibly be split up and sold off in parts to energy companies already listed on the NZX.
Milford Asset Management senior analyst William Curtayne said Meridian shares were priced this week at $1.50, at the lower end of the pricing range, due mainly to political risk associated with a Labour-Green future government.
The Government would be really pushed to meet its target of raising between $5 billion and $7 billion in proceeds from its partial privatisation programme.
Institutions were understood to not have been keen on bidding the price up because of the political risk.
The suggestion the Tiwai Point aluminium smelter would close had been discounted, because Meridian could sell the power supplied to the smelter back into the national grid, at a higher price than it was currently being sold.
The Meridian float was very different from the sale of Mighty River Power, which was surrounded by a lot of hype and bids pushing the eventual share price higher on listing, he said.
The pricing bid and scaling back for Meridian indicated much less demand.
Asked about the scaling back, Mr Curtayne said every IPO (initial public offering) had some scaling back to try to lift the price, but in the case of Meridian it was ''trying to raise the dead''.
''Some IPOs in Australia, we only get 10% of what we want. There is not much scaling here and we believe New Zealanders got everything they wanted. The political risk no doubt affected demand.''
The change in the global economy had also affected demand for Meridian shares, he said.
Six months ago, investors were looking for defensive stocks, like power companies. Now they were looking for growth stocks, such as Air NZ and Fletcher Building.
Air New Zealand would be much easier for the Government to get away next year, rather than Genesis, Mr Curtayne said.
Already, there were four listed energy companies - Mighty River, Contact Energy, TrustPower and Meridian, from next Tuesday. Putting Genesis up for sale, with its poorer assets, would be a ''hard sell''.
The Government could decide to break up Genesis and sell the parts of the company to the already-listed companies.
In that way, the Government would receive the money for the company but not have to go to the expense of a public float, presentations and printing a prospectus, he said.
Brokers spoken to agreed the political risk associated with Labour and the Greens had affected the share issue.
The NZX was getting top-heavy with energy companies. Three of the four were in the top 10 index.
All the companies were affected by climatic or market conditions in some way, either by drought for the hydro generators or peak prices for gas.
Labour state-owned enterprises spokesman Clayton Cosgrove estimated Meridian was sold for $1.2 billion less than Prime Minister John Key and Finance Minister Bill English promised. The float attracted only 62,000 investors.
''I don't know how John Key and Bill English can look the taxpayers of New Zealand in the face. They have sold half of a valuable long-term asset for $1.2 billion less than they told the public they would sell it for in 2011.
The number of Meridian investors was half of those taking up Mighty River Power shares, which was half of those investing in Contact Energy when it was sold in 1999, Mr Cosgrove said.
''At this rate of success, they will be paying people to buy Genesis Energy shares.''
The Government should use the referendum on asset sales as a face-saving exercise. The result would give it the reason it needed to stop the programme, he said.