Bidders circle Tilt Renewables as majority owner Infratil instigates strategic review

Another of Australia’s publicly listed wind energy companies could be heading towards a takeover and a de-listing, with Tilt Renewables’ largest shareholder announcing that it was considering ‘strong interest’ and a number of enquiries about the ownership stake.

In a statement to the ASX on Monday, Tilt said that the strategic review, launched by its majority shareholder, Infratil, could ultimately lead to a takeover offer for the company and the purchase of all outstanding shares.

Infratil owns 65.5 per cent stake in Tilt Renewables, which is currently valued at around $1 billion, and its involvement and approval would be key to the success of any takeover bid. Tilt said that its directors would “begin preparations” to respond to any takeover offer.

Tilt operates a portfolio 836MW of wind energy projects, and the value of shares in Tilt surged by more than 15 per cent on the announcement in early trading on Monday.

A takeover could see Tilt become the third ASX-listed wind energy company to be returned back in private ownership, after similar buyouts of formerly ASX-listed Infigen Energy and Windlab.

Infratil said that it had instigated the strategic review after receiving a number of approaches enquiring about the stake. Infratil has engaged Goldman Sachs to assist in undertaking the review, which it expects to take around six months to complete, but has yet to make a decision about whether it would divest itself of the stake in the wind energy company.

“Infratil remains committed to deploying capital in renewable energy globally and has established scaled platforms in Australia, New Zealand, United States and Europe,” Infratil CEO Marko Bogoievski said.

“We continue to assess opportunities in other geographies while evaluating the rate of development in our existing markets. We continue to be highly supportive of Tilt and its management team, however, the strong interest in Tilt has tipped the balance in favour of initiating the strategic review today.”

Infratil said that any offer would need to “demonstrate a material increase in expected returns and shareholder value relative to the current positive outlook” for Tilt.

Tilt has undertaken a range of recent project developments, including the recent development of the Snowtown 2, Dundonnell and Waipipi wind farms, and had accrued a significant cash balance, that ultimately lead to the company opting to return around half of it back to shareholders.

In April, Tilt announced that it would return up to $260 million in cash back to shareholders through a share buyback, with most of the cash balance accrued following the sale of the Snowtown 2 wind farm, which was sold to Palisade Investment Partners in a deal worth more than $1 billion.

In addition to its 836MW portfolio of operating wind projects, Tilt has a development pipeline that includes more than 2,500MW of projects with development approvals.

The company is also looking to develop a number of big battery projects in Victoria, totalling 150MW of capacity and 300MWh of storage, as the company looks to offer firming services to complement its wind power portfolio.

A takeover of Tilt would see the number of Australia’s publicly listed renewables firms further diminished, leaving very few pure-play renewables companies remaining on the ASX.

Earlier in the year, Windlab was taken off-market after being acquired by a consortium backed by mining billionaire Andrew Forrest and is now owned by Forrest’s Squadron Energy and Federation Asset Management.

Likewise, one of Australia’s oldest pure-play wind energy companies, Infigen Energy, was acquired by Spanish energy giant Iberdrola, who fought off a competing bid from Philippines based UAC Energy, in a buyout worth almost $900 million.