MELBOURNE/PERTH, Feb 6 (Reuters) - As embattled Australian power investment firm Babcock & Brown Power Ltd (BBP.AX)(BBP) hives off assets to pay down debt, at least three companies are hatching plans to capitalise on the distressed sales.
Bankers and analysts say Bahrain-based investment house Arcapita Ltd and top Australian energy retailers AGL Energy Ltd (AGK.AX) and Origin Ltd (ORG.AX) are eyeing BBP's suite of assets, three banking sources familiar with the deal said.
An Australian-listed energy firm, backed by an Asian sponsor, is also vying for a slice of BBP, said one of the banking sources with direct knowledge of the deal.
Sources said Arcapita, advised by Citigroup, had put in a bid in December for all of the BBP's assets, while AGL and Origin had submitted bids for parts of its assets.
Under the current sales process run by UBS AG, potential bidders were given the option to bid for the entire portfolio, or east or west coast assets, banking sources said.
"Some of BBP's power generation assets on the east coast would be very attractive for AGL and Origin because the power stations would give the utilities better risk management in their wholesale electricity hedgebook," said an analyst who asked not to be identified because of company policy.
Citigroup said in a research note late last year that Origin could consider acquiring at least three of BBP's power stations, including the Braema and Osborne stations in Queensland as well as Bairnsdale plant in Victoria state.
BBP, managed by investment bank Babcock & Brown Ltd (BNB.AX), began to seek bids in October after getting approaches for its assets or an outright sale.
The company, which lost 96 percent of its market value last year and was the worst performer last year in Australia's benchmark stock index, has been selling plants to reduce debt and bolster its balance sheet.
Parent company Babcock & Brown is also grappling with debt problems, and on Friday announced a restructuring deal with its creditors (click [nSYD328649] for more details). The company is demanding any new owner of BBP's assets pay them out to terminate its lucrative management contract.
BBP's portfolio comprises 12 operating power stations across the country. The firm, which has a market value of about A$443 million ($290.3 million), also owns Alinta retail gas, the largest gas retailer in western Australia, as well as a minority interest in a gas pipeline.
According to two banking sources, AGL has retained ABN AMRO Australia as financial adviser on the sale while Origin is believed to have retained Macquarie Capital Advisers to advise on the bid.
BBP Price at posting:
4.3¢ Sentiment: None Disclosure: Held
