Meridian Energy has made a takeover offer for NZ Windfarms. Photo: Supplied / Meridian Energy
- Meridian Energy proposes takeover of NZ Windfarms
- Meridian offers 25 cents a share - more than double last price
- Offer has backing of NZ Windfarms board
- Meridian would acquire Te Rere Hau windfarm in Manawatū
Big four power company Meridian Energy has made a takeover offer for the small NZ Windfarms (NZWF), as large generators look to bolster their assets.
The two companies have agreed a scheme of arrangement, which requires a lesser level of shareholder approval, with 25 cents being offered for each NZWF share, compared to its last traded price of 12.1 cents, and valuing the company at $91 million.
Meridian already owns 19.9 percent of NZWF, whose key asset is the Te Rere Hau windfarm in Manawatū, and the pair have a 50-50 joint venture to upgrade the windfarm and for Meridian to buy all the power generated.
"If the scheme of arrangement is successful, it will reward NZWF shareholders for the value created to date, while also enabling more efficient financing of the Te Rere Hau repowering project," Meridian Energy chief executive Neal Barclay said.
Future returns and risks
NZWF chair Craig Stobo told shareholders the board support the takeover because it offered certainty in getting the upgrade done and giving shareholders a decent return.
He said the company had looked around at financing options for the project as well, to secure its future.
"NZ Windfarms shareholders are exposed to current and ongoing development risks in bringing the Te Rere Hau Wind Farm repowering and other development projects to fruition and then operating them."
"The Meridian Proposal represents a low-risk option for shareholders to recognise the value ... the Board deems fair when compared against other equity offers," Stobo said.
The proposal will need an independent valuation, shareholder and regulatory approval.
It is the second takeover play in the power sector, with Contact Energy looking to buy smaller generator Manawa Energy. That is currently being considered by the competition regulator, which has expressed reservations.
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