New Zealand Business Times October 26

Headlines from the New Zealand Business Times
October 26

$1 Billion Industry Hinges On Clark Decision Page 1

A government research group has warned that up to $1 billion in foreign investment is at stake as Prime Minister Helen Clark considers the future of genetic engineering in New Zealand. Several New Zealand companies and organisations have already made contingency plans to take overseas millions of dollars in research work that is currently being carried out here. But the much larger risk, according to industry participants spoken to by the Business Times, is that proposed commercialisation of some biotechnology advances that are already being worked on will be scrapped here. The NZBT has learned that at least one New Zealand biotech company has already been courted by Australian authorities about setting up business across the Tasman, if Ms Clark imposes a moratorium on GE testing here.

Government Backtrack On Power Station Sale Could Be Costly Page 1

State-owned electricity company Meridian could pay more than $100 million for a power plant it sold just two years ago for $84 million. Meridian is understood to be one of the suitors lining up to bid for the Cobb power station, which is expected to be sold by the Natural Gas Corporation (NGC). NGC is tidying up its balance sheet after losing more than $300 million on a failed-foray into the retail electricity market. NGC is mainly a gas wholesaling, transmission and distribution business, but it also has some electricity generation assets left over from its botched move into the wider power industry.

Private Equity Industry Booming page 4

The private equity and financing industry is booming, as wealthy individuals look to exploit a lending gap that traditional banks are avoiding. The smaller lenders are flourishing because the prospect of an economic downturn is causing big banks to shy away from investing in businesses that want capital to expand. The private equity sector is also picking up deals that would usually be sold on the sharemarket through an initial public offering, but cannot be put away because of the stock exchange¹s current weakness and small investors¹ low appetite for new issues. ³Things are quite vibrant at the moment,² according to Nigel Poole, a principal with Auckland-based investment banking and business advisory group Ashe, Morgan Young Securities.

Spicers IPO Shelved By Bin Laden Terror Attacks Page 2

A public offering of shares in one of the largest fund management groups operating in New Zealand had to be shelved following last month¹s terror attacks in the United States. Instead, the company has been sold privately and will now be absorbed into multinational funds management group AXA. Uncertain global conditions following the New York catastrophe meant shelving a planned initial public offering (IPO) for Sterling Grace Portfolio Management Group, the company which runs retail investment and financial advisory group, Spicers, Money Monitor and Arcus Investment Management.

Contact¹s Shrewd Play To Show Through in Results Page 6

Contact Energy¹s shrewd playing of the electricity market will be revealed today when it is expected to report a significant surge in profits for its financial year to the end of September. The results have been rushed through to the market, in order to help investors judge a takeover offer for the company that has been lodged by Edison Mission Energy of the United States. Edison is offering $3.85 a share for the 50 percent of Contact it does not already own. The market has thumbed its nose at the offer, with Contact shares changing hands for more than $4.00 a piece this week.

Danone Offer For Frucor Undervalues Company Page 6

French consumer products company Danone¹s left-field offer by for 100 percent of beverages company Frucor appears to be aimed at picking up a bargain while the company is desperate to establish distribution channels in Europe. The $294 million for Frucor Beverages came on Wednesday, just days after Frucor was named by Forbes magazine as one of the top 20 companies in the world. Frucor¹s 31 percent shareholder Bain Capital will be selling. Bain Capital previously told analysts it never intended to hold its stake in Frucor long term, and will sell if an independent appraisal shows fair pricing to a corporate buyer.

Wool Board Expects Sparks To Fly At Annual Meeting Page 13

Wool Board directors can expect Guy Fawkes to start early this year as disgruntled growers line up at the board¹s annual meeting in Napier on Tuesday. There are clear indications that many growers are unhappy with the board¹s disestablishment process with a number of farmers putting in remits for the industry to be placed under statutory management until the process is complete. Wrightson managing director Alan Freeth said there is widespread dissatisfaction among growers over some of the intentions that the board has announced in the absence of hard business cases.

Team NZ faces Costly Security Bills Page 2

Team New Zealand might have to foot costly bills for increased security during next year¹s Americas Cup Regatta, as a result of concerns about terrorist-linked attacks. Security concerns could also scuttle plans to make the area bases for America¹s Cup challengers and the nearby superyacht marina on the Auckland waterfront much more open to the general public. Team New Zealand have discussed heightened security measures for cup teams and high-profile visitors, following last month¹s terrorism attacks in the United States and the ongoing war against terrorism.

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