The $11bn listed APA Group is understood to have hired investment bank UBS as part of an attempt to buy a 65.6 per cent stake in Tilt Renewables, currently worth about $1.3bn.
The stake is owned by Infratil, which is considering a sale after fielding approaches.
The understanding is that APA has investment bank UBS on board as it positions itself for a major equity raising should it win the auction.
Some say that the stake could achieve a price as high as $2bn and APA could tap the market for between $1bn and $1.5bn.
It comes after Infratil received a NZ$5.4bn takeover proposal from AustralianSuper that was rejected.
The world’s largest wind power investor Iberdrola, with at least $197bn worth of assets under management, is understood to have made an early bid for the stake last year ahead of the move by Infratil to test market interest.
However, while on that basis it was considered a front runner to buy the stake in the latest sales process, it is believed that its bid was rejected by Infratil and it is now understood that it is no longer in pursuit of the interest.
Spain’s Iberdrola has been keen to expand its interests in Australian and New Zealand renewable energy assets, buying the locally listed renewable energy investor Infigen Energy last year for $893m through a cash takeover that was backed by the company’s board.
Tilt Renewables owns wind and solar farm projects in Australia and New Zealand.
Working on the Tilt Renewables sales process is Goldman Sachs, which is also acting as Infratil’s defence adviser following the AustralianSuper approach.
Tilt has hired Lazard to provide defence advice.
First round bids for the stake were due on Friday January 22 and DataRoom understands that the groups that have put forward offers include AGL Energy and Queensland Investment Corporation through their Powering Australia Renewables Fund (PARF).
This is along with Canadian pension fund CDPQ and New Zealand’s Mercury Energy, which is already a substantial shareholder in Tilt with 19.9 per cent.
The auction is happening as several renewable energy portfolios are on the market amid strong demand from infrastructure investors and while coal is out of favour.
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