Infigen Energy Reiterates Stand Towards Takeover Offer
The battle surrounding the takeover offer for Infigen Energy continues. Back in June, UAC Energy Holdings’ first offer of 80 cents per stapled security appeared to be less favourable than that of Iberdrola’s. This is because Infigen Energy regarded UAC’s offer to be less superior and more conditional. As a result, UAC removed its bid conditions, increased its offer price to 86 cents per Infigen Stapled Security and successfully obtained FIRB’s (Foreign Investment Review Board) approval.
Despite these changes, Infigen advocated for Iberdrola’s offer as the latter put forward a revised offer of 89 cents per Infigen Stapled Security. While the Iberdrola offer is contingent on FIRB approval and a minimum acceptance of more than 50 per cent of Infigen Stapled Securities, the Board of Infigen believes that it will be able to fulfil all conditions during the offer period.
Yet should the takeover be successful, this would further reinforce an emerging trend currently at play. Specifically, Infigen’s $856 million takeover by Spain’s Iberdrola further implies that merely five in 20 renewable energy developers are locally-owned. This, therefore, leaves the remaining fifteen companies to have its headquarters in Shanghai, Madrid and Paris or specialised investment firms based in the United Kingdom and Luxembourg.
Analysts from Wood Mackenzie believe that local utility firm expressed zero interest in Australia’s largest renewables developers as they already have sufficient exposure to the country’s transition from fossil fuel to that of clean energy. For instance, local players such as AGL, the owner and operator of coal-fired power stations, remains to be the only local generator to make the top 20 through its stake. More notably, it is logical for players of this scale to not invest in Infigen as they already have ample exposure to risks inherent in the Australian market.
Rather, foreign energy firms are actively on the lookout to diversify their portfolios regard Infigen to be an attractive option as they boast two key features. The first being a greater tolerance for risk appetite within Australia’s volatile energy sector and the second being the financial capability to fund growth opportunities. From a broader perspective, foreign buyers believe that the demand for power was growing at a faster rate within Asia Pacific that that in Europe. Thus, Australia makes a promising target as the country remains to be one of the few open power markets.
Evidently, the fact that foreign firms boast deep pockets is true in the case of Infigen Energy. In its latest release, the Board of Infigen Energy unanimously encouraged investors to accept the revised off-market takeover from Iberdrola Renewables at 89 cents per Infigen Stapled Security. Specifically, the offer price is 3 cents higher than that of Iberdrola’s initial offer of 86 cents per Infigen Stapled Security and 9 cents higher than that of UAC Energy Holdings’ initial offer.
By Caroline Wong
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