I’ve said it before but I’ll say it again... I disagree.
UAC never said $0.80 was their first and final offer; in negotiations you rarely open with your best offer. It gives you no room to move. Especially given the “Truth in takeovers” laws in Australia which restrict bidders from increasing their bid once they’ve publicly announced it as their best and final offer. The Bidder Statement also specifically envisages that the offer can be increased (“Although UAC reserves the right to do so, it has no current intention of increasing the Offer Price.”). Enter: Iberdrola.
If UAC has no intention of upping their bid, why announce to the market after close on Friday that their FIRB condition has been satisfied...? This removes conditionality from the offer, reducing execution risk and increasing the attractiveness of UAC’s offer. I accept its likely Iberdrola will also receive approval from FIRB, nevertheless it’s one less hurdle to clear for UAC.
The major hurdle UAC has is financing. If they can secure financing for the deal and return with an improved offer in the 90s then TCI are entitled under their pre bid agreement with Iberdrola to roll into UAC’s offer. In this scenario, UAC’s offer would be superior to iberdrola’s in both price and conditionality.
Dont get me wrong, Iberdrola is in the box seat right now. But the fat lady hasn’t sung just yet
