Clean energy company Infigen Energy (ASX: IFN) is the subject of a takeover bid after UAC Energy Holdings, 75%-owned by giant Philippines conglomerate Ayala Corporation, snapped up 12.82% of the target through an on-market raid Tuesday.
The on-market buying was handled by Credit Suisse on UAC’s behalf.
UAC says it now intends to make an all-cash takeover bid of $0.80 per stapled security. It claims the value of the offer totals $777 million.
UAC said the offer price is an “attractive” 43.4% premium to the one-month weighted average of $0.56 per stapled security.
On Wednesday, Infigen advised shareholders to take to no action while directors studied the takeover proposal.
The offer is conditional on Foreign Investment Review Board approval and provisions of Infigen’s debt financing agreements.
Infigen owns three wind farms in NSW (one near Wellington, the other two around Lake George outside Canberra) and one in Western Australia.
The company generates and retails what it calls competitive clean energy focusing on spot and forward contracts through the National Energy Market, which takes in NSW, Tasmania, Victoria, South Australia and the Australian Capital Territory.
Bidder lists what it sees as Infigen’s failings
The announcement by UAC says the offer is particularly attractive “in the context of recent falls in electricity prices as well as Infigen’s relatively high debt servicing costs, its limited track record in paying distributions, and decisions taken by Infigen to suspend investment in a number of projects and defer the delivery of its development pipeline”.
UAC chairman Anton Rohner said his company’s business and that of Infigen are complementary from an investment perspective.
UAC is developing two projects in Tasmania, the Robbins Island renewable energy park (about 1,000 megawatts) and Jim’s Plain renewable energy park in the northwest of the island state (about 1,200MW), both of which are key projects for the proposed second Bass Strait power interconnector between Tasmania and Victoria and the planned “Battery of the Nation” pumped hydro scheme in Tasmania.
The bidder also has NSW Government approval for a solar farm in New England. Its other projects are pumped hydro and solar in South Australia and a grid-connected solar farm at Bendigo.
Mr Rohner said the acquisition of Infigen will be consistent with its strategy of investing in opportunities in the renewable energy sector.
“We have ready access to capital and significant renewable energy expertise that will position us well to support Infigen’s pipeline of projects,” he added.