Buller Electricity has stopped trying to lock-in acceptances for its planned takeover of Pulse Energy.
Buller owns 56 per cent of the company and has teamed up with Pioneer Generation to buy the rest of the business, the country’s seventh-largest electricity retailer.
It had planned to make a formal takeover once it had locked-in an unspecified volume of shares in advance.
But late on Friday, Pulse said Buller had discontinued its lock-in efforts and would not enforce the agreements it had secured.
“BEL has advised Pulse that on further consideration BEL believes that all security holders should have the opportunity to review the independent adviser’s report prior to making any decision whether to accept BEL’s takeover offer.”
Pulse says Buller anticipates lodging its takeover notice this week at the price indicated earlier this month.
Buller intends to offer 11 cents a share for the business, $1.10 for the firm’s mandatory convertible notes and 5 cents for its options. The shares closed at 10.1 cents on Friday.
Pulse has just under 335 million shares on issue, valuing the company at $33.9 million. Last year it issued 4.81 million mandatory convertible notes at $1 each and at March 31 it had 3.95 million options outstanding with an exercise price of 6 cents each.
The stock was trading at 6 cents before Buller announced its potential takeover on September 8. The shares had traded as high as $2 when first listed in late 2007.
Pulse had about 710 shareholders at the end of May, but the top 20, including Buller, former chief executive Dene Biddlecombe and some of the firm’s earliest investors, accounted for 86.4 per cent of those.
After Buller, the biggest shareholders are chief executive Gary Holden, director James Hoseason and Frank Dooley, chairman of both Pulse and Buller. Collectively they hold about 13.8 per cent of the company’s shares.
The trio acquired most of their shareholdings in a 2013 issue at 6 cents each. At May 25, Holden had 19.25 million shares and 300,000 MCNs, Hoseason held 16.7 million shares and one million MCNs and Dooley interests held 10 million shares and 100,000 MCNs.
Pulse has about 55,000 electricity customers, making it the seventh-largest retailer after Todd Corporation-owned Nova Energy. It added about 1,000 power customers during the 12 months through September. The company, which provides the Grey Power Electricity brand, has also added about 1,500 gas users since October.
Westport-based Buller invested in the business in 2009 to improve its non-regulated income and to encourage more retail competition for customers within its own region. It took a controlling interest in 2011 to keep it operating.
Alexandra-based Pioneer, owned by the Central Lakes Trust, is also growing. It already retails about 172 GWh of electricity – almost three-times its volume a year earlier. Its wind farms, hydro dams, co-generation and landfill gas sites generated 235 GWh in the year ended March 31, 5 per cent more than the year before.
In the past year it has agreed a renewable energy supply agreement with start-up retailers Ecotricity. In April it agreed to form a generation partnership with the PowerNet group of distributors in Southland, Invercargill and Otago and in May it acquired the ECOsystems energy management business.