Infigen Energy is understood to have instructed Lazard to engage with under-bidders in the Pacific Hydro auction to test interest and tap into the resurgence of M&A appetite in the sector.
Infigen Energy is understood to have instructed Lazard to engage with under-bidders in the Pacific Hydro auction to test interest and tap into the resurgence of M&A appetite in the sector.
The hotly contested sale of Pacific Hydro by IFM Investors to China's State Power Investment Corporation in a deal said to be worth more than $3 billion, including debt, left several suitors standing on the sidelines in late 2015. Street Talk understands Infigen is now weighing several options, including offloading assets, a joint venture, and assessing valuations potential suitors may place on a cornerstone stake or the entire company.
With the Pacific Hydro deal said to represent a multiple of 17 to 20 times earnings before interest tax, depreciation and amortisation - well above Infigen's trading multiple of 10 to 11 times - there looks to be scope for a value adding deal. The Pacific Hydro process is understood to have lured interest from China's Huadian Corporation, France's ENGIE, TransAlta, Marubeni Corporation, Morgan Stanley Infrastructure Fund and Spain's Gas Natural. That means Lazard – which is also handling the Alinta auction – has its hands full.
Buyout firm Pacific Equity Partners is also thought to have sniffed around the Infigen wind farm portfolio, while Thailand's Wind Energy Holding has more recently revealed its local ambitions, buying half of developer CWP Renewables.
Infigen, the former Babcock & Brown Wind Partners, has become a more marketable entity after last year's sale of its US business, which has helped reduce debt. That has been reflected in its share price, with the stock last week reaching 77¢, a level not seen since 2010.
Any deal would require a nod from cornerstone shareholder The Children's Investment Fund Management, with a 32.6 per cent stake, but the firm is said to be open to value creating offers.
