erm in the news again.

ANGELA MACDONALD-SMITH
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EPW
ERM POWER FPO (EPW)
$2.605$0.01(0.19%)
Volume 181766 Value 471654.0
5 Year
1 Day

as at 12:24 Australia/Sydney 30 JAN 2014
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Company Profile
The Company sells electricity to large commercial, industrial and government customers in Australia. The Company also develops, has ownership interests in, and operates large scale low emission gas-fired power stations across Australia.
http://www.ermpower.com.au
Electric Utilities (551010)
ASIC 122259223
ASX Announcements
9:12:29 AM ACCC to not oppose ERM Power / Macquarie Generation
31/12/13 Repayment of Oakey debt facility
16/12/13 Final Director's Interest Notice - Brett Heading
12/12/13 Board update
06/12/13 Completion of Oakey Power Station acquisition
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Analysis
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Queensland-based ERM Power has secured the green light from the national competition authority to go ahead with a proposed bid for large New South Wales generator Macquarie Generation, the largest asset being sold in the current round of the state’s power privatisation.

The clearance from the Australian Competition and Consumer Commission was expected given ERM’s lack of existing baseload electricity generation capacity in eastern Australia.

Less certain is a similar clearance that rival MacGen bidder AGL Energy is seeking, given AGL’s baseload capacity in Victoria at the Loy Yang A power plant. MacGen’s two power plants, Liddell and Bayswater, acccount for almost a third of the state’s electricity supply.

Final bids for MacGen are due with Goldman Sachs, the NSW government’s adviser for the privatisation on February 5, the same day as the ACCC is due to release a decision on AGL’s bid.

The generator has a book value of $2.1 billion, but bids are expected to fall short of that, at around $1.5 billion. A third bidder, Japan’s Marubeni, is also in the running, while a fourth, China’s Shenhua Group, has pulled out.

ACCC Chairman Rod Sims said the watchdog found a takeover of MacGen by ERM was unlikely to “substantially” reduce the competitiveness of power plants or retailer, or raise barriers to entry into electricity markets.

“Our review indicated that an ERM acquisition of Macquarie Generation is likely to ensure that competition is maintained and may potentially be enhanced in the relative markets,” Mr Sims said of ERM’s planned bid.

“A key factor in forming this view was the limited generation assets of ERM in Queensland and lack of existing generation assets in New South Wales, Victoria and South Australia.”

ERM is expected to require an equity raising of several hundred million dollars, plus take on debt of up to $1 billion, to fund a bid for MacGen.