Spanish renewable energy giant Iberdrola has received clearance from the Foreign Investment Review Board to proceed with its proposed $864 million takeover of ASX-listed wind farm developer Infigen Energy.
Iberdrola announced on Tuesday that there were now no major outstanding conditions on its takeover bid, which has also won the endorsement of the Infigen Energy board.
Iberdrola was forced to increase its offer to Infigen shareholders, to 89 cents per share, after an earlier bid of 86 cents per share was matched by a rival takeover bid from Philippines based UAC Energy.
The Infigen Energy board has urged its shareholders to reject the UAC Energy offer, in favour of accepting the Iberdrola bid, telling shareholders that the Spanish firm was offering better value to shareholders.
“Iberdrola’s offer is a compelling opportunity for Infigen security holders that provides liquidity and attractive value by comparison to the market price history of Infigen securities prior to the recent announcements of takeover bids,” a spokesperson for Iberdrola said.
The only outstanding condition for the Iberdrola bid was that at it received acceptance from shareholders representing at least 50 per cent of Infigen Energy shares. Given the bid had the backing of Infigen’s largest shareholder, The Children’s Investment Fund, which holds around one-third of Infigen’s shares, the Iberdrola bid was confident of success.
The takeover has been hotly contested, with the two rival offers looking to both outbid each other, while also talking down the prospects of success of their respective competitors.
At one point, the UAC Energy bid, which trades as UPC Renewables in Australia, suggested that Infigen Energy had significantly underperformed as a company, suggesting that its initial bid of 80 cents per share was generous.
With clearance from the Foreign Investment Review Board and the endorsement of both the Infigen Energy Board and Infigen’s largest shareholder, the Iberdrola takeover bid looks set to succeed, short of another increased offer from UAC Energy. Both bids are now open for acceptance by shareholders.
“The Infigen Directors continue to unanimously recommend that Infigen Security Holders accept the Iberdrola Offer and will accept, or procure the acceptance of, the Iberdrola Offer in respect of any Infigen Stapled Securities they own or control or otherwise have a Relevant Interest in, in each case, in the absence of a Superior Proposal,” Infigen Energy directors said in a statement to the ASX on Tuesday.
The deal would see Infigen Energy integrated into the Iberdrola company portfolio, with the Spanish firm already establishing itself as a global leader in clean energy investment. The publicly listed Spanish firm has a market capitalisation of more than A$105 billion.
Iberdrola recently announced that it would continue to expand its investments in the global clean energy sector, committing to make EU$ 10 billion (A$16.2 billion) in new projects over the next year, as part of its own contribution to driving an economic recovery following Covid-19 caused disruptions.
“We have the resources and energy to drive a recovery in which everyone wins: employees, suppliers, shareholders and society in general,” chairman of Iberdrola group Ignacio Galán said.
“We strongly support the strategy for a rapid and sustainable recovery being based on the ‘European Green Deal’.”
Iberdrola already has plans for its expansion into the Australian market, with a 650MW development pipeline that includes a 320MW hybrid wind and solar project planned in South Australia’s Spencer Gulf.
Infigen Energy shares were trading around 92 cents per share on Tuesday, indicating that shareholders may anticipate further bids.
Infigen Energy has engaged Gilbert + Tobin, Goldman Sachs and Lazard Group as advisors on the takeover proposals.