Slide 1: ASX announcement cover note: ContactOrigin presentation
Origin energy To Company Announcements Office Facsimite 1300 300 021 Company Australian Stock Exchange Limited Date 18 May 2006 From Bill Hundy Pages 33 Subject PRESENTATION Attached for your information is a copy of a presentation entitled “ContactOrigin - Dual Listed Companies Structure” that cont
Slide 2: ContactOrigin Dual Listed Companies structure
ContactOrigin Dual Listed Companies structure 17°May 2006
Slide 3: Important notice
Important notice This presentation has been prepared by Origin Energy Limited (Grigin Energy) for the purpose of providing a summary of the proposed dual listed companies structure (Merger Proposal} to Origin Energy shareholders, Contact Energy shareholders, and other interested parties. Details of
Slide 4: Contents
Contents 1. Introduction 2. Structure and mechanics of a DLC 3. Investor questions Origin
Slide 5: 1. Introduction
1. Introduction Origin
Slide 6: Introduction
Introduction «On 20 February 2006 Contact Energy and Origin Energy announced their intention to merge through the implementation of a Dual Listed Companies structure (DLC structure or DLC) to be known as ContactOrigin «On 10 May 2006, Contact Energy made a release to the NZX in relation to an update
Slide 7: DLC Rationale
DLC Rationale Ongoing ownership for Contact: shareholdors: ‘No tax:‘payment by revenue account: > Contact shareholders: No:tax paymont hy: Origin: Sharahsiders: No flowback of Origin sbares > New Zealand shareholder » base:retained New-Zealand shareholders ot Contact Rnergy witt:ba able: to: receive
Slide 8: 2. Structure and mechanics of a DLC
2. Structure and mechanics of a DLC Origin —
Slide 9: Dual Listed Companies structure
Dual Listed Companies structure « The DLC structure is used by some leading companies globally Larger Party Smaller Party Year established Re : 2 : ae peace 1995. Waited Kingdom). 2 (Rosteaiay nee Bu iiton Sage - (Rusuraliay © © (United Kingsom) : “Barnbuat 2 PRO: ies {United States), {United Kingdo
Slide 10: Dual Listed Companies structure (continued)
Dual Listed Companies structure (continued) « The relative contribution of Contact Energy and Origin Energy is similar to other DLCs Current ownership i Larger part Smalier: patty. ms : notes: ta}. based on shares seld by respective groups of shareholders within DLC structures as at {4 Aprit 2006 ea
Slide 11: Overview of Dual Listed Companies structure
Overview of Dual Listed Companies structure » Contact Energy and Origin Energy agree to merge » The merger is achieved by contract - companies agree to operate as if a single economic entity » Shareholders continue to hold their existin: shares - Origin’s cross-halding is eliminate » The economic in
Slide 12: Principles of the DLC Structure
Principles of the DLC Structure Singie economic enterprise Equalised rights to all Contact Energy and Origin Enerey shares 44 Contact Enerey and Origin Energy will operate, as 2 if they v were a single unified economic ee enterprise. pee sf ‘Boards: ‘of Directors: will be identical | The Directors o
Slide 13: What the DLC means for Contact Energy shareholders
What the DLC means for Contact Energy shareholders ‘+ Contact Energy minority shareholders will retain’ their Contact: Energy shares; they veil Snot give them: up or exchange them as part-of the DLC ee Contact: Energy will’continue to be fisted onthe NZSX and shareholders will-be able to continue. f
Slide 14: Key DLC agreements: Sharing Agreement
Key DLC agreements: Sharing Agreement Equality: of ee “The Sharia Agreement regulates te relationship between the companies treatment for + Combined with amended constitutions: it ensbrines ‘equality of treatment for each set of shareholders shareholders urider the DLC structure: ae Contact, Enerey
Slide 15: Key DLC agreements: Voting Agreements
Key DLC agreements: Voting Agreements Equal voting Febts Special Voting Companies. Voting mechanics 14 Dn snost: matters Gant electorate actions) all shareholders of: Contact Energy and Origin: Energy. vote asa ‘groupwith:# Origin: ‘Eneray. orditiary-share equivalent fa ACortact’ ee) ordinary: share
Slide 16: Key DLC agreements: Deed Poll Guarantees
Key DLC agreements: Deed Poll Guarantees Each sompany. guarantees most of the parent obligations ‘of the othe f; cveatig a single crea pool AS result, it does not matter to lenders (from a credit perspective) which Of Contact cnersy oF Origin Energy-is. the: borrower. within, the’ combined group. E
Slide 17: Changes to the companies constitutions
Changes to the companies constitutions ee) “Contact Energy. aad Origin: Eneray peepee € stitutions 40 allow the two companies: te-aperate asf they: ere: asingle economic, entity: cunder: the DLC this: eaultes 2 the vate of: gach: ene of shatehs PR: he purposes ‘of: the amendments Jincltide to: 320 F
Slide 18: Takeovers
Takeovers ee contact Energy Wilt ‘adopt ‘ariew: w constibution: and ‘Origin Energy: will make: ‘gmend ents to-its: aaratuatinn . EE facilitate the DLE being: treated ‘BS fit: Wasa. singlesentity: ithe eventof-a takeover: i gee oThe objective: Will be:tovensure: tha iE Contact Eriergy ’ ‘Shavehotders
Slide 19: 3. Investor questions
48 3. Investor questions Origin
Slide 20: Question #1: Are DLCs too complicated?
Question #1 Are DLCs too complicated? + DLCs have been used for cross border mergers of other successful companies + Rio Tinto was created in 1995 through the merger of RTZ (UK) and CRA (Aus) using a DLC structure + BHP Billiton was created in 2001 by the merger of Billiton (UK) and BHP (Aus) using
Slide 21: Question #2: Is the DLC a 'takeover in drag'?
* * * ry Question Is the DLC structure a ‘takeover in drag’, designed as #2 a clever way around the Takeovers Code? The BLC Structure is not a takeover and requires shareholder approval for both companies involved Contact Energy shareholders are not being asked to give up the Contact Energy shares t
Slide 22: Question #3: Origin moving from 51.4% to 75.7%?
Question Does the DLC represent Origin Energy moving from #3 51.4% ownership in Contact Energy to 75.7%? « Origin Energy took control of Contact Energy in 2004 through the acquisition of a 51.4% majority shareholding - under the DLC, Origin Energy’s shareholding in Contact Energy is eliminated and t
Slide 23: Question #3 cont'd
Question #3 cont'd Does the DLC represent Origin Energy moving from 51.4% ownership in Contact Enersy to 75.7%? « Unlike cash takeover offers, the DLC structure is a true merger - Contact Energy shareholders continue to participate in the future growth of ContactOrigin « Unlike some mergers, Contact
Slide 24: Question #4: How have Contact Energy's shares traded?
Question How have Contact Energy's shares traded since the #4 announcement of the proposed merger? « As at 16 May the Contact Energy share price was trading at over 20% higher than immediately prior to the announcement of the proposed merger « When the Origin Energy share price is adjusted into NZ$
Slide 25: Question #4 cont'd
Question How have Contact Energy's shares traded since the #4 cont'd # announcement of the proposed merger? + The merger terms imply a premium to Contact Energy share price on day of announcement of NZS0.70 on constant currency basis + This premium increases to NZ$1.35 inclusive of NZS0.75 positive
Slide 26: Under the DLC will either stock trade at a discount?
Under the DLC will either stock trade at a discount? + Aprice disparity can emerge between the two traded stocks making up a Dual Listed Companies structure + Trading disparities have been observed in each of the three DLCs most relevant to ContactOrigin’s establishment BHP Billiton Rio Tinto Carniv
Slide 27: Question: market integration and trading disparity
Question UK/AU AU/NZ Studies suggest trading disparity can result’ ~ Econoiic integration % aoe from:stock market excess co-movementy. 9% Geographic proximi ¥ Rue ‘whichis reduced by thé degree'of market : ae B ae ‘Market integration Fime.zohe sinilanty: e 3 are i fi smiecsinnilay % Paar segmentatio
Slide 28: Appendix I: Voting actions under a DLC
27 Appendix |: Voting actions under a DLC Origin —
Slide 29: Voting actions under a DLC
Voting actions under a DLC so Shareholders of both companies effectively vote as 4 single decision’ making body.on matters ‘which affect both Contact: Energy. & Origin: Energy: shareholders anvsimilar: ee eg “Appointment or removal of any director. : Sc oMatters considered at an annual shareholders!
Slide 30: Appendix II: Contact Energy minority shareholder rights before and after DLC
29 Appendix Il: Contact Energy minority shareholder rights - before and after DLC Origin —
Slide 31: Contact Energy minority shareholder rights
Contact Energy minority shareholder rights Approval requirement Current Po: ion After DLC Implemented t. General rsholer vole ‘abla to vote gin Energy’ san vordro! aeleeme of vksion or Origit Ene Congact Enpryy and Cs wukcoms (where inlereet Contact Energy shareholders can Influence outcome - ria ce
Slide 32: Contact Energy minority shareholder rights (continued)
Contact Energy minority shareholder rights (continued) Approval requirement Current Position After DLC Implemented &. Relates party transactions with Ongin Energy Ondinary resolution sequined Origin Energy cannot vole $1.4% stake — therefore minorities can effectively block resolution aoproval of es
Slide 33: Contact Energy minority shareholder rights (continued)
Contact Energy minority shareholder rights (continued) Approval requirement Current Position After DLC Implemented 41. Takeover of Contact Energy + Chrigin Energy cous arcept and conitel passes + fiirorties nave wssing, bul oan aise accent silty to step cont Dfferce must mae equreaient otter for Bag