Bidding war for ownership

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A fierce battle broke out last month for ownership of Australian wind project developer Pacific Hydro. A widely publicised bid for the publicly traded company from Spanish construction giant Acciona, which recently bought major wind developer Energía Hidroeléctrica Navarra, was almost immediately trumped by a higher offer from Australia's Industry Funds Management (IFM). The superannuation funds manager already owns 32% of Pacific Hydro.

IFM's bid of A$4.60 a share, A$0.10 a share higher than Acciona's March offer, values Pacific Hydro at A$725 million (EUR 432 million). This is around A$17 million (EUR 10 million) more than under the Spanish company's bid. Acciona is yet to comment on whether it plans to launch a higher counter bid in response.

As a major shareholder in Pacific Hydro, IFM strongly opposed the original Acciona offer. "There's nothing in the proposal which would cause us to change our view that we would like to be a long term investor in Pacific Hydro," said the company's Garry Weaven. Referring to IFM's counter offer, which has been recommended for approval by the independent members of Pacific Hydro's board, he says: "There's a good match between us and the company and we want to boost our exposure to the renewables asset class."

Weaven adds: "We see special value for IFM's investors in Pacific Hydro. IFM's offer ensures that this first-class Australian company remains Australian owned and controlled." Pacific Hydro's Jeff Harding says: "It's in the interests of all shareholders to have a higher bid." Under the terms of their original negotiation agreement, the board's withdrawal of support for the Acciona bid triggers a A$6 million compensation payout to the Spaniards.

The IFM offer is conditional on it receiving acceptances from other shareholders entitling it to more than 50% of Pacific Hydro shares as well as on gaining regulatory approvals.

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