Telstra eyeing Meridian deal, report

Australian telecommunications provider Telstra is said to be eyeing a potential purchase of Meridian Energy’s Australian business, according to an Australian media report.

Meridian put its ownership of Meridian Energy Australia (MEA) under review in June with a view to a possible partial or full sale.

Meridian Energy Australia is a vertically integrated electricity business owning 294 megawatts of renewable generation capacity, 150MW of renewable development opportunities and with a retail business branded Powershop Australia, delivering electricity to 140,000 customers and gas to 40,000 customers.

Telstra is believed to be considering an acquisition of MEA, according to a report in The Australian.

It would probably partner with another group to buy MEA, according to The Australian, which also reported that others expected to line up as potential buyers include French energy company Engie.

The Weekend Herald has requested comment from Meridian Energy on the report.

Meridian hired financial advisory firm Lazard in May to review its Australian strategy amid energy margin pressure and a drop in earnings there.

Meridian, which owns and operates two windfarms and three hydro stations in Australia to support its Powershop retail arm, is due to report its full-year result next Wednesday.

Last month a Jarden analyst report forecast Meridian’s full-year earnings before interest, tax, depreciation and amortisation would be $727 million to June 30, down from $854m in the 2020 financial year, with a full-year dividend payout of 17.2c per share.