Chanticleer columnist John Durie got it half right on the back page of The AFR this morning when he wrote:

The loony tune brigade on the federal government side of the house are
having a field day with the Snowy Hydro sale, with moves to introduce
legislation to impose shareholding limits and otherwise cripple the
company.

Firstly, a shareholding limit will not “cripple” Snowy. Santos still
has a 15% shareholder limit courtesy of the South Australian Parliament
not liking Alan Bond controlling gas supply, and it is going just fine,
although the stock would be 10-20% higher if a decent takeover premium
was factored into the price.

Also, it’s not just the Federal Government side of the house because
the three country independents – Tony Windsor, Bob Katter and Peter
Andren – are meeting the PM tomorrow in an attempt actually to stop the
sale rather than just impose the 10% shareholding limit in perpetuity
which is being promoted by National Party MP Kay Hull in a private
members’ bill.

All this political carry-on will almost certainly wipe at least $100
million off the sale price if the cap is legislated, although it is
completely unnecessary given that the Federal Government retains the
ultimate foreign takeover protection through the FIRB.

Combine that with the audacious High Court challenge by Victorian
independent Craig Ingram and “Johnny come lately” ranting by the likes
of Alan Jones and we’re looking at a political dog’s breakfast, which
was always to be expected when three governments of different political
persuasions are conducting the one privatisation process and the asset
deals with the hot issue of long term water rights.

It certainly doesn’t help that the primary vendor is two big spending
ALP state governments each facing an election within 12 months. Morris
Iemma was politically very brave to embark on this sale. It just goes
to show how desperate for election spending cash he’s become after
discovering what a financial basket case Bob Carr and Michael Egan left
behind.

Peter Fray

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