Iberdrola trumps Ayala with offer for Australian renewable energy firm

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By Sonali Paul and Shashwat Awasthi

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MELBOURNE/BENGALURU (Reuters) – Spain\\\’s Iberdrola has made an agreed A$828 million ($569 million) bid for Australian wind and solar firm Infigen Energy , topping an offer from Philippine conglomerate Ayala Corp .

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Iberdrola\\\’s bid comes as it looks to invest a record 10 billion euros ($11 billion) this year through acquisitions and wind farm projects, including in France and the United States.

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“The acquisition of Infigen is a unique opportunity for the Iberdrola group to consolidate its presence in the attractive Australian renewable energy market through a friendly transaction,” Iberdrola said in a statement.

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Iberdrola is already building a 320 megawatt renewable energy project in South Australia.

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Infigen accepted Iberdrola\\\’s offer and urged shareholders to reject an earlier bid from UAC Energy, a joint venture of Ayala\\\’s AC Energy and Hong Kong-based UPC Renewables Group, as the Spanish bid was 7.5% higher with fewer conditions.

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“The offer from Iberdrola follows an extended period of engagement with Infigen regarding potential cooperation or a control transaction,” Infigen said.

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Infigen said its top shareholder, British activist investor TCI Fund Management, has agreed to sell 20% of Infigen securities, most of its holding, to Iberdrola, if no higher bid emerges.

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Iberdrola and UAC pounced on Infigen after its share price slumped due to falling power prices in Australia and challenges facing wind and solar firms hooking up projects to a shaky grid.

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Iberdrola, advised by Nomura, will pay A$0.86 a share for Infigen, 46% more than Infigen\\\’s closing price on June 2, the day before UAC landed its unexpected bid.

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“It\\\’s not a knockout blow,” said Canaccord Genuity analyst James Bullen, who has an 89 cent target price on Infigen.

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Infigen shares jumped 8.5% to a three-year high of 89 cents, suggesting investors expect a bidding war.

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Analysts had expected counterbids for Infigen, as it is attractive for its seven wind farms and a large pipeline of projects which it recently put on hold to save money.

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UAC is considering its position, a spokeswoman said.

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Other companies looking to expand in renewables in Australia include France\\\’s Total Eren and Neoen .

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(This story has been refiled to correct spelling of \\\’Canaccord\\\’ Genuity in paragraph 10; The error occurred in a previous version too)

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(Reporting by Shashwat Awasthi in Bengaluru and Sonali Paul in Melbourne; Editing by Stephen Coates)

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