Iberdrola eyes 50 per cent threshold, lifts Infigen Energy takeover bid to $893m

Spanish renewables giant Iberdrola has increased its bid for ASX-listed wind developer Infigen Energy, this time to $893 million, in an effort to encourage early acceptance from shareholders.

The increased bid will see Iberdrola purchase Infigen Energy shares at 92 cents per share, up from an 89 cent per share offer, on the condition that at a further 13 per cent of shares register acceptance the offer before 30 July.

Iberdrola has already acquired acceptance representing 24.48 per cent of Infigen Energy shares, which includes a pre-bid purchase of a 20 per cent holding from the UK-based Children’s Investment Fund, and an additional 4.28 per cent of shares that have already accepted Iberdrola’s takeover offer.

If a further 13 per cent of shares accept the takeover offer, and presuming it secures the additional approval of the remaining 13.1 shareholding held by the Children’s Investment Fund (which is likely given it has already supported the takeover offer with the sale of a 20 per cent stake), it would see acceptance of the Iberdrola offer surpass the 50 per cent threshold.

“Infigen security holders now clearly have even more compelling reasons to immediately accept Iberdrola’s superior, friendly, Board endorsed offer,” a spokesperson for Iberdrola said.

The increased offer from Iberdrola is the latest in a bidding war for Infigen Energy that was kick-started by Philippines based infrastructure investor UAC Energy.

UAC Energy launched a hostile takeover offer for Infigen Energy in June with an initial offer of 80 cents per share, valuing Infigen Energy at $777 million.

The Infigen Energy board baulked at the UAC Energy offer and has urged shareholders to reject the bid.

However, the board has embraced the ‘friendly’ takeover offer from Iberdrola, saying that it presents better value for money and would see Infigen become part of a much larger portfolio of renewable energy investments globally.

It is understood that some of Infigen Energy’s major shareholders, which includes the Canadian Brookfield Renewables fund which owns 9 per cent of Infigen and Australian Ethical Investment which holds a 5 per cent stake, are likely to also prefer the Iberdrola offer on the basis of its own status as a pure-play renewable energy investors.

UAC Energy is a subsidiary of the Makati headquartered Ayala Corporation, which has diversified investments in major infrastructure projects, including coal and gas generators.

Both bids issued statements talking down the offer of their respective rivals, in both cases siting conditions placed on the offers before an offer would proceed.

Each of the bids required, and have subsequently secured, approval from the Foreign Investment Review Board, and both bids are now unconditional.

Whatever the outcome, Infigen Energy shareholders have been the beneficiaries of the bidding war, with the value of the company now standing at $893 million, a $116 million increase on UAC Energy’s initial bid.

UAC Energy has previously confirmed that will not increase its bid to match the Iberdrola offer, leaving the company making an alternative offer of 86 cents per share, now 7 per cent less than the Iberdrola offer.

Infigen Energy operates a 670MW portfolio of wind generation across seven projects, including the Capital and Woodlawn wind farms in New South Wales and each of the three stages of the Lake Bonney wind farms in South Australia.

The 57MW Cherry Tree wind farm in Victoria is currently undergoing commissioning.