Iberdrola outbids rival for Australian renewables player - updated

Iberdrola has outbid a Filipino-Hong Kong joint venture (JV) to take over Infigen as a bidding war for the Australian clean energy developer escalates.

Infigen owns stakes in more than 1GW of operational wind power capacity, including the 140.7MW Capital wind farm in New South Wales, Australia
Infigen owns stakes in more than 1GW of operational wind power capacity, including the 140.7MW Capital wind farm in New South Wales, Australia

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This story was first published on 17 June 2020 when Iberdrola first bid to take over Infigen Energy Limited and Infigen Energy RE Limited. It was updated on 29 June to reflect increased offers from both Iberdrola and rival bidder UAC Energy Holding.

The Spanish giant's Australian clean energy unit has offered to acquire 100% of the stapled securities issued by Infigen Energy Limited and Infigen Energy RE Limited. Stapled securities consist of two or more securities that are contractually bound to form a single saleable unit.

Meanwhile, UAC Energy Holdings - a JV of Philippines-based conglomerate Ayala Corporation’s AC Energy and Hong Kong-based UPC Renewables - has increased an earlier bid and removed due diligence and disclosure conditions.

Iberdrola increased its bid from A$0.86 (US$0.59) to A$0.89 per share, while UAC increased its offer from A$0.80 to A$0.86 per share.

Infigen’s Board has unanimously recommended that shareholders accept Iberdrola's offer “in the absence of a superior proposal”.

Iberdrola’s revised bid of A$0.89 per share is 75.7% higher than the three-month volume-weighted average price of Infigen securities prior to a 3 June takeover bid by UAC. It is also 3.4% higher than UAC’s latest bid.

The deal would see Iberdrola pay a total consideration of A$869.92 million (US$596.91 million) for the entire share capital of Infigen — 3.4% higher than the earlier sum proposed.

Infigen’s largest shareholder — the Children’s Investment Fund Management — had entered into a pre-bid acceptance agreement, whereby it would sell 20% of Infigen stapled securities to Iberdrola Australia. It is not clear yet how the increased bids will affect this agreement.

Infigen’s shares closed up 3.4% at A$0.92 after Iberdrola increased its bid.

An Iberdrola spokesperson explained: "Acquiring Infigen Energy will enable Iberdrola to tighten its hold on the new and highly relevant market that Australia represents, being a priority market for the group since it announced plans to launch there earlier this year."

Iberdrola is developing the 320MW Port Augusta wind-solar hybrid project in South Australia.

Post-pandemic investment

Earlier this year, Iberdrola pledged to invest €10 billion as part of its coronavirus recovery plans in 2020, and has since made acquisitions in France and Poland, and also set its sights on an offshore wind pipeline in Poland.

Infigen owns 670MW of operational onshore wind, 268MW of conventional generation and energy storage firming assets. The developer has 246MW of additional renewable capacity from third parties contracted through offtake power purchase agreements and a 1GW-plus portfolio of wind and solar projects in various stages of development.

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