Renta 4 | Iberdrola has announced a takeover bid for 100% of the Australian renewables company Infigen Energy at a price of AUD 0.86$ per share. This is in line with Infigen Energy’s current stock price, but 6% higher than the offer made by UAL Energy on 9 June. It values Infigen at AUD 841 M (510 million euros approximately, 0.7% of Iberdrola’s market cap), with an EV/EBITDA multiple of 8.2x (vs 10x at Iberdrola’s current price).
The success of the offer is subject to acceptance by 50% of shareholders, and the approval of the relevant Australian institutions. It will be funded from available cash and has been recommended for acceptance by the Australian group’s Board of Directors. Iberdrola has agreed to buy the main shareholders of Infigen (TCI funds)’s 20 pct stake on condition the takeover bid is approved.
Infigen manages 670 MW of wind capacity and 268 MW of conventional generation and storage. It also manages electricity production for third parties amounting to nearly 250 MW through power purchase agreements. At the same time, it has a portfolio of 1 GW solar and wind assets under development.
If the deal is finally confirmed (we do not know if there could be a third party offer that would improve the one offered by Iberdrola), we consider the acquisition positive, albeit the impact is limited. At a qualitative level it allows Iberdrola to strengthen its presence in Australia in the field of renewables.
In addition, Iberdrola has hired Dennis V. Arriola, one of the most important executives in the electricity sector in the USA, for its subsidiary Avangrid. Arriola was until now the executive president of the American energy company Sempra. Arriola will replace 67-year-old James Torgerson who is retiring next week. Arriola has over 25 years of experience in the energy sector where he has held senior positions, including that of president of Southern California Gas.