Infigen gets rival offer

Wind farm operator considers Spanish bid

INFIGEN Energy is recommending a rival takeover bid from Spanish utility Iberdrola valuing it at $835 million.

Australia’s largest listed wind farm operator says Iberdrola has agreed to pay Infigen shareholders a price of 86 cents a share, a 7.5 per cent improvement on an unsolicited takeover bid by UAC, a unit of Philippines conglomerate Ayala Corp.

Shares in Infigen surged more than 35 per cent earlier this month after it received the 80c a share offer from UAC.

The company had termed the timing of UAC’s bid “opportunistic” and yesterday rejected the offer.

Infigen said Iberdrola’s offer followed an extended period of engagement regarding potential co-operation or a control transaction. The company says its largest shareholder, UK-based investor The Children’s Investment Fund, has signed a pre-bid agreement to sell a 20 per cent stake to the Spanish energy company two months after the offer process starts.

This is subject to the Foreign Investment Review Board approving the takeover and no superior offer emerging. TCIF owns a 33.1 per cent stake in Infigen. UAC has also amassed a 13.4 per cent stake in the renewables energy company.

RBC Capital Markets analyst James Nevin said the Spanish acquirer had emerged with a strong bid.

“We think the Iberdrola offer represents a good price for Infigen’s shares given its current outlook,” he said in a note.

“With Iberdrola’s bid also including a matching right it means that any counter bid from either UAC Energy or another bidder would need to be at a material premium to its 86cps offer to prevent Iberdrola simply exercising its matching right.” Infigen’s board has recommended Iberdrola’s takeover offer to shareholders, saying it is less conditional overall and is also not subject to the due diligence and disclosure conditions contained in the UAC offer.

Iberdrola has also offered to extend an unsecured loan on arm’s-length terms to Infigen if its lenders call for a debt review.

Iberdrola has a 320 MW Renewable Energy Park under construction at Port Augusta in South Australia.