Tilt Renewables says it has “a number” of suitors, invites binding offers

Australian listed wind farm developer Tilt Renewables has revealed it has received a number of non-binding offers to buy the company, in the latest development spurred by a strategic review launched late in 2020 by majority shareholder, Infratil.

Tilt said in an ASX statement late last week that it had reviewed a number of proposals from unnamed suitors and had decided to proceed to the next step with some of them, with the financial guidance of Lazard, and irrespective of the Infratil review.

“The board of Tilt Renewables has reviewed the proposals and decided to grant a number of parties access to due diligence material to enable these parties to prepare binding proposals,” the February 4 statement said.

“The board notes that participation in Infratil’s strategic review process is not a prerequisite to it considering any proposals in respect of Tilt Renewables.”

As noted above, the parties behind the latest indicative offers for Tilt have not been named, although media speculation about potential suitors has thrown up a number of possibles, including APA, Mercury Energy and AGL Energy with QIC and Canadian fund CDPQ.

Tilt has been a takeover target since December 2020, when Infratil, which owns a 65.5 per cent share of the company, launched a review off the back of inquiries from parties interested in buying the roughly $1 billion stake.

At the time, Infratil said the Goldman Sachs-assisted review would be conducted over a six-month period, and 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, which operates a portfolio 836MW of wind energy projects and a development pipeline with more than 2,500MW of projects, including a number of big battery projects in Victoria, said at the time that its directors would “begin preparations” to respond to any takeover offer.

This latest ASX statement suggests the company now has all its ducks in a row, although it stressed on Thursday that there was no certainty it would receive binding proposals, or that any proposals would be recommended by the board to shareholders.

As RenewEconomy has reported, 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 2020, 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.

Tilt has undertaken a range of recent project developments, including 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 of 2020, Tilt announced 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.

Tilt says it is has appointed Lazard as financial adviser on the possible company sale, and Russel McVeagh and Ashurst as legal advisers.