Babcock-led consortium offers $7.4bn for Alinta
A consortium led by investment firm Babcock & Brown Ltd (B&B) and one of Singapore’s biggest companies has offered $7.4 billion for energy infrastructure group Alinta Ltd.
The cash and scrip deal involving B&B, three of its funds and Singapore Power International (SPI) values Alinta at $15 a share and represents a 39 per cent premium to its 30-day average weighted share price.
Alinta said that after weighing several proposals to takeover the company it would recommend the offer to shareholders.
‘’While it will be sad to see the end of Alinta as a listed company, the consortium’s offer is an attractive one,'’ chairman John Akehurst said.
‘’Under the offer, Alinta’s shareholders will receive a strong mix of cash and securities which provide a continuing exposure to growth and yield stocks in the energy infrastructure field.'’
The consortium is offering $8.50 cash per share, 7.83 Babcock & Brown Infrastructure securities, 3.31 Babcock & Brown Power securities and 1.3 Babcock & Brown Wind securities for every five Alinta shares held.
It is also offering an in specie distribution of 1.51 Australia Pipeline Trust units or equivalent for every five Alinta shares.
Alinta said the total consideration for shareholders would rise to $15.40 after the inclusion of a fully franked dividend of 40 cents per share.
It added that the cash component of the consideration may be subject to working capital and asset sale proceeds adjustments that are expected to be minor.
‘’The board received proposals to acquire the company from two consortia and has been in negotiation with them over the last six days,'’ Mr Akehurst said.
‘’There has been a thorough and rigorous evaluation in which due regard has been given to the value of the considerations offered and to the conditions and risks associated with the proposals.'’
‘’The proposals were also compared against possible internal restructuring alternatives.
‘’The board has concluded that the B&B/SPI consortium has made the superior proposal, following an open and competitive tender process.'’
Other suitors are rumoured to have included a Macquarie Bank Ltd-led consortium.
Alinta has signed a scheme implementation agreement and shareholders are expected to meet in July to vote on the deal.
The bidding for Alinta began after former chief executive Bob Browning and former chairman John Poynton proposed a management buyout in January.
In the same month, Alinta took itself out of the race to buy Origin Energy Ltd’s infrastructure assets.
B&B chief executive Phil Green said today the offer was unique.
‘’Through our partnership with Singapore Power we have been able to structure a unique offer which delivers benefits to all stakeholders,'’ he said.
‘’The transaction delivers Babcock & Brown’s specialised funds and asset management platform access to high quality, strategically important assets, which are complimentary to existing asset portfolios and deliver significant scale and synergies.
‘’The cash generative nature of the assets will allow the funds to continue to focus on a strong cash distribution profile,'’ Mr Green said.
Under the deal, B&B’s three funds will acquire certain Alinta assets.
B&B Infrastructure will take Alinta’s energy transmission and distribution assets and operations and maintenance businesses, B&B Power will acquire its 970 megawatt power generation portfolio and
67 per cent of its Western Australia retail assets, including about 566,000 customers, and B&B Wind Power will acquire its interest in the Wattle Point Wind Farm.
SPI said it was in talks with its Australian utility infrastructure investment vehicle SP AusNet about which Alinta assets it would acquire.
It said SP AusNet will be first offered the chance to consider its investment opportunities.
AAP
