Interest in Infratil investment crystallizes

IFT

1.855

0.01

0.27%

Click for a detailed chart

Fairfax Media

INTEREST PICKING UP: Interest in an Australian energy company in which Kiwi firm Infratil is the largest shareholder is picking up.

Relevant offers

Companies

Mainfreight profit leaps on record earnings TelstraClear sinks to pre-tax loss Smart apps deliver a crust for Domino's ASB annual profit surges Ravensdown more than doubles profit Diligent on rising sales track Telecom courts iPhone users Grim news for Charlie's Winglets tipped to save millions Unrealised loss for property trust

Interest in an Australian energy company in which Kiwi firm Infratil is the largest shareholder is picking up.

Energy Developments Ltd, which is listed on the Australian Securities Exchange, said private equity group Archer Capital had revised its indicative offer for it to A$2.80 per share for 100 percent of the company. Previously Archer had provided an indicative range of A$2.40 to A$2.80 per share.

Wellington-based infrastructure investor Infratil said last month it had granted Archer a call option over 19.99 percent of its 32.1 percent stake in Energy Developments.

The Aussie firm noted today, however, that Archer's revised proposal remained subject to an extensive list of conditions. These included third party debt and equity funding, detailed due diligence as well as certain other unspecified requirements.

Archer will conduct due diligence on Energy Developments over the next two to three months. However, Archer is not alone. Energy Developments said it had also invited "other qualifying parties" that had recently indicated interest in acquiring 100 percent of it to also undertake due diligence.

Nonetheless Energy Developments remained cautious.

"There is no assurance that these processes will result in an offer capable of being put to shareholders for consideration," it said.

Brisbane-based Energy Developments touts itself as a producer of green energy with 552 mega watts of power plants fuelled by landfill gas, coal mine methane, LNG, CNG and pipeline natural gas in Australia, Britain, the United States and through joint ventures in France and Greece.

Energy Developments produced a 6 percent rise in profit after tax, but before one-off items, to A$9.9 million for the six months to December. In its last annual results Infratil said it had written down its stake in Energy Developments by $113.7 million to $73.3 million. 

Last month Infratil said following talks with Sydney-based Archer, it had granted the firm the call option. The option did not specify an exercise price for the Energy Development shares held by Infratil, and none had been agreed.

The option only becomes effective if, and when, a cash exercise price was agreed between Archer and Infratil and either a takeover bid from Archer, or takeover scheme agreed between Archer and Energy Developments, becomes unconditional.

"This will allow Infratil, if it wishes at the time, to sell the balance of its shareholding into the bid or scheme," Infratil said.

Infratil said it had also agreed, in certain unspecified circumstances, to reimburse Archer's costs and share "defined" upside benefits. Furthermore the call option provided for various milestones to be met. If they were not met it expires, Infratil said.

Archer, which bought accounting software provider MYOB in January, also owns Auckland-based office technology distributor Onesource Group and its financing arm Leasing Solutions Ltd after buying them - in partnership with management - from Eric Watson and Mark Hotchin's Hanover Group for $150 million in 2005.

Energy Developments also said today in remained in separate advanced discussions with an international infrastructure specialist that is offering A$280 million for the Aussie firm's British and French landfill gas power generation assets. However, there was no guarantee this deal would be completed.

- © Fairfax NZ News