New Zealand Bus Limited (NZBL) has undertaken today to the High Court that it will not proceed with the acquisition of 74% of the shares in Mana Coach Services Ltd pending the outcome of a trial set down for two weeks from 22 May to 2 June 2006.

The current owners of the shares, Blairgowrie Investments Ltd, Copland Neyland Associates Ltd, Rhoderick Treadwell, Kerry Waddell, Karyn Cosgrave and Ian Waddell (the Vendors) have also today undertaken to the court not to transfer the shares to NZBL pending the outcome of the trial.

The main issue at the trial will be whether the acquisition of the shares would have, or would be likely to have, the effect of substantially lessening competition in a market in breach of s 47 of the Commerce Act 1986.

The Commission issued proceedings on 30 March 2006 against NZBL and the Vendors alleging that the acquisition would breach s 47 of the Commerce Act 1986, and sought an injunction restraining this acquisition. The Commission also sought an interim injunction restraining the acquisition pending the outcome of the trial. The application for interim injunction was due to be heard in the High Court at Wellington today. However, the Commission is satisfied that the undertakings not to proceed given today by NZBL and Mana remove the need for an interim injunction.

Prior to today's undertaking, NZBL had offered an undertaking to acquire the shares in Mana, but to run Mana separately from the rest of NZBL's Wellington operations, pending the outcome of the trial. The terms of this previous undertaking were not acceptable to the Commission.

Background

NZBL, through its subsidiaries, operates bus services in the Greater Wellington region under the 'Stagecoach Wellington', 'Cityline Hutt Valley' and 'Runciman Motors' brands. NZBL is a 100% subsidiary of Infratil Ltd. Mana operates bus services in the Greater Wellington region under the 'Mana' and 'Newlands' brands.

NZBL already owns 26% of Mana. NZBL agreed to purchase the remaining 74% of the shares in Mana at the end of 2005. The sale and purchase agreement was conditional on obtaining clearance or authorisation from the Commerce Commission. The Commission registered NZBL's application for clearance on 16 January 2006.

On 15 March 2006, NZBL withdrew its application for clearance and informed the Commission that it would be acquiring the shares on 3 April 2006. The Commission then opened an investigation into whether the acquisition would breach s 47 of the Commerce Act.

As a result of this investigation, the Commission was of the view that the acquisition of the remaining shares in Mana would, or would be likely to, have the effect of substantially lessening competition in the market for rights to operate subsidised regular bus and school bus services in the Greater Wellington region (excluding Wairarapa).