Windlab investors green light Forrest-backed takeover, while Infigen resists its own

Windlab shareholders have overwhelmingly voted in support of an Andrew ‘Twiggy’ Forrest backed takeover offer for the wind farm developer, revealing that 99.6% of shareholder votes cast were in support of the proposal on Friday.

The takeover is being led by investment fund Federation Asset Management and has the backing of Andrew Forrest’s Squadron Energy. It values Windlab at around $68 million, and had been anticipated after Federation secured a 18.4% stake in Windlab in the second half of 2019.

Andrew Forrest joined the consortium in March through Squadron Energy, which forms part of the mining magnate’s Tattarang investment group.

Windlab was originally a spin-off of the CSIRO, seeking to commercialise innovative wind resource modelling software, but in recent years expanded into the project development and operation services market.

The Federation and Squadron Energy joint proposal offered shareholders $1.00 in cash for all outstanding shares in the company, which had been trading just over 70 cents at the time. It will see the company return to private ownership.

In an address to shareholders prior to the vote, Windlab management said that they were in support of the deal, saying it represented good value for shareholders and provided an opportunity for the company to continue to grow.

“The Windlab Directors unanimously recommend that Windlab Shareholders vote in favour of the Scheme, in the absence of a Superior Proposal, and subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Windlab Shareholders,” Windlab independent director Charles Macek said.

Ahead of the takeover vote, the Federation and Squadron energy consortium agreed to provide Windlab with a $20 million debt facility, to help provide an additional capital injection for the company, particularly as it deals with an ongoing dispute over the long delayed Kennedy Energy Park project.

On Tuesday, Windlab updated shareholders on the Kennedy Energy Park project, which has largely completed construction but has been unable to connect to the grid due to a failure to deliver a compliant generator performance standard to AEMO. Windlab remains in negotiations with its EPC contractor to settle a dispute over the connection failure.

Windlab recorded a $29.4 million write-down on the Kennedy Energy Park, as a result of the grid connection delays, but hopes to recoup some of this value through negotiations with the EPC contractor.

The Windlab takeover is now subject to the approval of the Supreme Court of New South Wales, which will consider the proposal on 12 June and the acquisition of Windlab by the Federation and Squadron Energy consortium is expected to be finalised by 26 June.

Meanwhile, another publicly listed wind energy company, Infigen, has told its shareholders not to take any action in response to its own takeover offer, a $777 million play by UPC and AC Energy.

Infigen pointed to the fact that the UPC and AC Energy offer was “highly conditional” as it would be subject to a review by the Foreign Investment Review Board, due to AC Energy being headquartered in the Philippines, and directly questioned whether the takeover offer was fully funded.

It is understood that Infigen Energy hopes to be able to drum up competing offers for the company, including seeking interest from major global energy players like Shell, which has made a significant push into the Australian electricity market in an effort to diversify its business.

The Infigen board said that it believed the UPC and AC Energy offer was “opportunistic”, taking advantage of recent falls in the Infigen share price, and suggested that the offer significantly undervalued the company.

“[Infigen] is strategically positioned for long-term success in the renewable energy market. Since 2016, Infigen has transitioned its business from being an owner, operator and developer of wind farms to operating an integrated energy business that is able to ‘firm’ its renewable energy and sell energy directly to end users,” the Infigen board said in a statement.

“Infigen is well placed to manage the risks and capture the opportunities that the transitioning Australian energy market presents and has been therefore described by industry analysts as the ‘utility of the future’.”

The Infigen Energy board recommended that shareholders “take no action” in respect to the takeover offer until it has had an opportunity to assess the proposal.

RenewEconomy and its sister sites One Step Off The Grid and The Driven will continue to publish throughout the Covid-19 crisis, posting good news about technology and project development, and holding government, regulators and business to account. But as the conference market evaporates, and some advertisers pull in their budgets, readers can help by making a voluntary donation here to help ensure we can continue to offer the service free of charge and to as wide an audience as possible. Thank you for your support.