Iberdrola takes control of Australian renewables player - updated

Iberdrola has claimed victory in a bidding war against a Filipino-Hong Kong joint venture to take over Australian clean energy developer Infigen

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

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, on 16 July when Iberdrola waived conditions attached to the order and again when Iberdrola took control of Infigen.

Iberdrola has taken control of Australian clean energy developer Infigen following a bidding war against a Filipino-Hong Kong joint venture  (JV).

The Spain-based utility's investment in Infigen has now obtained a majority (52.75%) voting stake, giving it effective control of the Australian developer.

Its takeover of A$0.92 (US$0.66) per stapled security is scheduled to close on 19 August.

Earlier this month, Iberdrola waived the last of the conditions attached to its public takeover  for all 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.

With a majority of voting rights, Iberdrola can now nominate a majority of board members to Infigen Energy Limited and Infigen Energy RE Limited, as long as there are two independent directors on the boards until Iberdrola acquires all of the Infigen stapled securities.

Iberdrola had raised its bid from A$0.86 to A$0.92 per share, while UAC Energy Holdings – a joint venture of Philippines-based conglomerate Ayala Corporation’s AC Energy and Hong-Kong based UPC Renewables – increased its offer from A$0.80 to A$0.86 per share and removed previously attached due diligence and disclosure conditions.

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$0.92 per share is 82% higher than the three-month volume-weighted average price of Infigen securities prior to a 3 June takeover bid by UAC. It is also 6.9% higher than UAC’s latest bid.

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.

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 Sweden, and 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.

It expects Ebitda and net revenue for the 2021 fiscal year to be materially lower than in 2002 due to lower electricity prices resulting from the Covid-19 pandemic, it stated.