What the deal was about
Listed Infratil owned 51% of listed generator Manawa and the Tect Community Trust (formerly the Tauranga Energy Consumer Trust), held a nearly 27% stake. The remaining shares were held by institutional investors, asset managers and the public.
And while the deal was the largest public scrip-based peer-to-peer transaction in New Zealand history, it wasn’t the biggest Fuge had handled.
He led the $3.1 billion sale of Pacific Hydro by IFM Investor Australian Infrastructure Fund in 2016 to China’s State Power Investment Corporation.
Under the transaction, completed in July last year, Manawa shareholders received $1.12 in cash plus 0.5830 new Contact shares per share held, a total implied valuation of $6.37 per share. This represented a premium of around 47% to Manawa’s share price at the close before the scheme announcement. Infratil last month sold 5% of its own new shares in Contact to fund future growth. It received $9.25 per share for the sale, generating gross proceeds of around $495 million. It has retained a 9% shareholding in Contact.
Contact Energy CEO Mike Fuge and team accepting the award of M&A Transaction of the Year at the 2026 Infinz awards for the company’s $2.6 billion acquisition of Manawa Energy – one of the country’s largest and most complex scrip-based deals. Left to right: Shelley Hollingsworth, Neil Millar, Sam Turner, Connor Anderson, Tim Boyce, Bodica Macdonald, Mike Fuge, Jan Bibby, Dorian Devers, Matt Forbes, Kirsten Clayton, John Clark, Brett Woods, Jason Zhu, Will Thomson, Jennifer Hewitt, Saralaya Frost, Emily Ross, Max Montgomery, Tejan Vallabh and Rachel Kirby.
Loose lips avoided
The risk of loose lips was also avoided when Contact needed $900m bridging finance to complete the transaction. The gentailer has relationships with multiple banks but approached just one financier, UBS, for the temporary loan. As an insider said, “The more people who know about these things or that you are considering them, the more likely you will get a leak.”
Strategic foresight
Contact started looking seriously at Manawa Energy, the country’s largest independent electricity generator, in 2022. But the entity, in its previous NZX-listed form, Trustpower, had been on its radar much longer.
Manawa evolved in May 2022 after Trustpower’s retail energy and telecommunications business was acquired by Mercury, the country’s biggest energy generator, for $441 million. Trustpower’s remaining electricity generation business was rebranded as Manawa.
That sale to Mercury opened two doors.
Analysis of potential of energy generation synergies with Manawa showed greater promise than earlier scrutiny. Forward price contracts entered into with the 2022 customer sale didn’t fully reflect their value when electricity prices moved up in 2023 and 2024.
And with Manawa’s retail business gone, potential competition law issues were substantially lessened. There would be no retail customer consolidation.
Getting down to it
Fuge says a small group was put to work in late 2022 to look at the possible value of a deal.
“Number one with any deal is that you’re very clear there is real value accretion potential for shareholders. Then you make sure that in every step in the process you are relentless in pursuing that value.”
After opportunities and risks are identified, comes the modelling, he says.
But that’s not all about the findings on a spreadsheet.
“As you do the transaction, it’s important you bring it to life. So every promise made was relentlessly tracked through to delivery. Whether it was cost savings or portfolio benefits, there was a lot of effort put into making sure we understood those well. And those were tracked through, and continue to be tracked through, to completion.
“It’s not a done deal when you announce it. It’s not a done deal when you complete it. It’s a done deal when shareholders see the value.”
Jumping through regulatory hurdles
As Contact management and advisors continued to work up a compelling proposal to put to Contact’s board of directors, heavy economic and legal analysis was also under way to ensure the case would stack up for Commerce Commission approval.
Getting the proposal over the line with shareholders was all-important, but so too was the upcoming scrutiny by the competition watchdog.
With the regulator in mind a decision was made to negotiate to enter a scheme of arrangement with the target, rather than launch a takeover, say insiders.
A scheme entails taking a proposal to shareholders for a vote.
It’s not a done deal when you announce it. It’s not a done deal when you complete it. It’s a done deal when shareholders see the value.
Mike Fuge
A takeover offer entails approaching shareholders directly and asking to buy their shares.
The Takeover Code has a prescribed timetable. The would-be acquirer essentially has 120 days from the first notice to complete the deal.
Contact was concerned the Commission would not make a decision within that time.
Says Fuge: “A lot of resources were being committed and it could have been a challenge to get it through the Commission – as their draft decision proved.”
The scheme was announced to the market on September 11, 2024. The commission approved the deal in May last year.
“We believed it was the right thing to do for shareholders, the right thing to do for the market, and the right thing to do for the country,” he says.
“It allowed an iconic set of assets to remain in majority New Zealand ownership.
“In a good commercial deal, it’s important you’re very clear-eyed that this is the price at which it’ll work, and this is the price at which it won’t; and here is the value and how it’s going to be shared and how it’ll accrue to shareholders.
“And we were very clear-eyed about that. The structure of the deal at the end allowed shareholders to pass judgment. The result can be seen with our share price going up.”
Communication is key
Fuge believes the quality of communication with shareholders, not just commercial logic, sealed the deal.
“We did work very hard to explain it to shareholders, starting from the way it was announced. We continue to refine those messages.
“Shareholders are intelligent, capable people, so you feed them good-quality information. You don’t try to hide risks. You’re transparent. We were delighted with the outcome, but that level of disclosure was key.”
While doing due diligence and getting the numbers right and how they will be delivered is important in such a transaction, so is “taking care of the soft aspects”, says Fuge.
“I’ve been on the other side of a transaction like that. This is when people feel very vulnerable, so making sure you’re taking care of people and that you’re communicating clearly when you’re pointing people to the future is important.”
“You need people with good intelligence who are representing their shareholders and who behave with integrity and goodwill.”
Fuge says the benefits of the acquisition showed in Contact’s half-year results and will be evident in FY26 results.
“We’re very happy with the way the benefits are tracking.”
by Fran O’Sullivan
Alison Gerry has challenged directors and finance professionals to embrace disruption and not allow “trepidation” over global shocks and technological disruption to paralyse decision-making.
Gerry’s challenge came as she was honoured with a Distinguished Fellowship at the recent New Zealand Institute of Finance Professions (Infinz) awards in Auckland.
Alison Gerry addresses the Infinz awards dinner after being honoured with a Distinguished Fellowship by Infinz deputy chairman Will Goodwin (background).
Receiving the industry’s top honour, Gerry – a highly regarded company director who chairs infrastructure investor Infratil and serves on the boards of Air New Zealand, ANZ Bank NZ, and Sharesies Australia – used her remarks to draw a sharp parallel between today’s turbulence and the turmoil of the Covid era.
She recalled being on the Infinz Awards stage in May 2020, when she received a fellowship: “The world had just locked down. Supply chains were fracturing. And we wondered what the world would look like when it was all over.”
“Six years on we’re facing into another wave of uncertainty. Conflict in the Gulf has sent energy prices surging. And threading through everything is AI — not something on the horizon anymore, but already changing how industries work, what skills matter, and what we thought we understood.
“Two big disruptions at once. It’s natural to feel some trepidation. But in our roles we can’t let trepidation lead to paralysis. And right now, the oil market is showing us exactly why.”
Gerry pointed to the turmoil in global oil markets as a live example of the pressures now bearing down on firms and policymakers. “What is happening in energy markets right now is a masterclass in complexity. The relationships between physical and forward markets, between crude prices, refinery margins and jet fuel prices have been thrown into disarray by the Gulf conflict.
“Supply routes that held for decades have shifted. Traders, treasurers and – believe me – board members, are having to reason in real time as to what is the best path through this uncertainty.
In our roles we can’t let trepidation lead to paralysis. And right now, the oil market is showing us exactly why.
Alison Gerry
She credited the finance industry with having built some extraordinary frameworks — for pricing risk, allocating capital, making sense of complex markets. “But occasionally — sometimes gradually, sometimes suddenly — the world moves on from the assumptions those frameworks were built on. And that’s exactly the moment where curiosity matters most. Not in defending the model, but in being willing to say: something has changed here, and I need to think about this differently.
“Holding a framework lightly enough to question it isn’t a lack of rigour. It actually is rigour. It’s what separates real expertise from going through the motions.”
Gerry said the people she had admired most over her 35 years in financial markets — and around the board tables of Kiwibank, the NZX, Sharesies, ANZ and Air New Zealand — haven’t been the ones with all the answers. “They’ve been the ones who treated uncertainty as a signal that there was something new to understand. Who asked better questions rather than defending old ways of doing things.
“Sharesies is a great example of this — when they decided there was a better way of providing access to investing, they built something that now has more than a million customers.”
Gerry observes that curiosity when she meets members of the INFINZ’s Young Women in Finance group. “The women who stand out are not the ones with the most confidence — they are the ones with the best questions. That is what we are trying to grow — a generation of women and men in finance who are curious, confident, and unafraid of complexity.”
Her comments came after Infinz deputy chairman Will Goodwin described Gerry as a “very respected senior company director and industry leader whose influence spans capital markets, infrastructure and digital finance”.
As well as her current roles, she has previously served as founding chairperson of online investment platform Sharesies and as a director of NZX, Spark, Vero, Kiwibank and TVNZ.
Beyond governance, Gerry was also recognised for her contribution to advancing women in business. She is a co-founder of the women’s leadership network “On Being Bold”, which runs an annual conference and offers programmes aimed at building confidence and supporting the progression of mid-career women. She is also a regular speaker for International Women’s Day and a former judge of the Financial Services Awards.
Her executive career began with roles at Macquarie Bank and HSBC, and she later became Group Treasurer at Lion in Sydney. She also contributed as a Visiting Fellow teaching in the Masters of Applied Finance programme at Macquarie University for 12 years.
Alison Gerry is a Fellow of both the Institute of Directors in New Zealand and INFINZ.