Why you should NOT accept the offer:Infigen has existing wind...

Why you should NOT accept the offer:

• Infigen has existing wind assets with a strong and proven production record. Given the uncertainties in building new assets, it's likely that quite a few competing projects will now be delayed or cancelled. This improves potential future revenues for Infigen's existing assets.
• Infigen is well placed in the state that is to undergo the most significant change over the next decade. In NSW, Liddell Power Station will close in 2023, and Vales Point will likely close in the late 2020s.
• NSW has a low 'covariance risk' of wind generation at the moment compared with Victoria and South Australia which have much higher renewable penetration
• NSW currently has the highest wholesale electricity futures prices in the NEM. Best place to own assets and sell retail contracts right now.
• Cherry Tree wind farm is close to financial close - and is very close to the power hungry Cadia mine in Orange - i.e. with a solid load, there is a low likelihood of a change in Marginal Loss Factors (MLFs) at this site
• Smithfield energy facility has recently undergone an overhaul to make it more compatible with fast start operations, making it perfect for firming
• Infigen has been improving its retail arm and have started selling a firmed PPA product that is well structured and likely to be very successful in the coming years

There is no way that Infigen is only worth only ~$850 million given its current portfolio of assets and its cash position. It's clear that the market expects the sale price to be well over $0.86 (with considerable trades above $0.90). I would have expected a valuation over $1 billion for sure. Iberdrola are super keen to buy Infigen, the only hope now is a new bidder.