Ampol runs the ruler over Meridian’s renewable assets

The auction for Meridian Energy’s Australian renewable energy business could be about to get more interesting. Picture: Liam Kidston

The auction for Meridian Energy’s Australian renewable energy business could be about to get more interesting, with suggestions in the market that fuel retailer Ampol may be taking a look.

Insiders say a deal would make sense for Ampol, given that its management led by Matthew Halliday wants to bring the Ampol brand into other sectors.

It comes at a time that Ampol has launched a $NZ2bn ($1.9bn) bid for New Zealand fuel retailer Z Energy, a business it is now carrying out due diligence on

Ampol reinforced its strategy during its half year results presentation last month where it said its focus remained on future energy and decarbonisation.

The impact on the fuel retailer from the growth in the use of electric cars is no doubt playing on the minds of the directors on the Steven Gregg-led board and Ampol’s leaders.

Ampol supplies the country’s largest branded petrol and convenience network as well as refining, importing and marketing fuels and lubricants.

Its assets including the Lytton Refinery and a fuel trading and shipping business, as well as Gull New Zealand service stations and its Australian petrol retailing chain.

In 2020, it was the subject to a $8.8bn buyout proposal by Canada’s Couche Tard, which walked away due to the global pandemic, and also a partial bid by EG Group around the same time that was rejected.

Its market value sits at $6.6bn, with the shares closing on Tuesday at $27.56.

The NZ-based Meridian Energy is selling its Australian business through Lazard and among the suitors expected to line up are French energy company Engie and Telstra.

The understanding is that Telstra is keen to participate in the auction for the Australian electricity retail and generation business as part of a move to increase its customer base.

Promotional material for the auction has recently been sent to prospective suitors.

Meridian describes the Australian business as a vertically integrated electricity operation, owning 294MW of renewable generation capacity and 150MW of renewable development opportunities.

It has a retail business branded Powershop Australia, which delivers electricity to 140,000 customers and gas to 40,000 customers.

AGL, Origin Energy and Energy Australia are expected to take a look, although may face commission challenges.

Some analysts says the business would be suited to smaller energy providers like Alinta while energy giant Shell may also have an interest.

The price for the portfolio is expected to be about $1bn.

Meridian generates more than a third of NZ’s electricity. It was one of three electricity companies formed from the break-up of the government’s Electricity Corp of New Zealand.