The Mixed-Ownership Model – did it work?
In a recent article in the NBR entitled “SOEs’ selldown rewarded investors, not taxpayers”, Brent Sheather discussed the results of the selldown by the Crown of 49% of its shares in Meridian Energy, Genesis Energy and Mercury (the “Mixed Ownership Model”). Sheather noted the large increases in value of the three SOEs since their public listings, alongside the increases in their dividends. He claims that because of the sales, taxpayers have missed out on $3.4 billion worth of dividends.
However, could it be the case that the improved performance and increased dividends of all three companies have been a result of their partial privatisations? In a response article in the NBR, TDB Director Phil Barry points out that Sheather makes the critical assumption that the increases in value and dividends of the MoM companies would have occurred had they remained 100% owned. On the flipside, Phil’s article discusses the overall success of the sales on a number of fronts. Read both articles (right) and see who you side with.