Origin Energy and its Canadian pension fund partner CDPQ have been granted an extension for lobbing an offer for CWP Renewables, according to sources.
Final bids for the $4bn Australian renewable energy provider were due on Monday. However, it is understood that Origin and CDPQ are yet to submit their final offer.
Three parties are left in the competition, including the world’s largest wind farm owner, Iberdrola, along with QIC and AGL Energy’s renewable energy venture Tilt Renwables, and Origin with CDPQ.
Sources say that Origin and CDPQ’s offer is likely to land next week.
One theory is that the adviser for the sale process, Macquarie Capital, could add another stage to the process where all three groups would be asked to submit their best and final offer to ensure the contest was an even playing field.
The understanding is that delays at Origin Energy’s end have held up the bid. The company is subject to a $15.5bn buyout by Canadian private equity firm Brookfield and EIG.
The latest situation does not necessarily suggest Origin’s appetite to buy CWP Renewables is waning. Early in the contest, Origin and CDPQ were considered the frontrunners.
Iberdrola would have more financial power than the other bidders, but the question is whether it wants to put forward a knockout offer for CWP Renewables as it wrestles with the introduction of windfall taxes on energy companies in Spain where its head office is based.
Tilt Renewables has the least financial power of the three, say sources.
QIC purchased Tilt Renewables from Infratil last year for a price valuing the business at $3bn through the PowAR venture, owned by QIC, AGL Energy and The Future Fund.
The purchase was in partnership with Mercury NZ and the winners fended off competition from CDPQ, which was the underbidder.
The challenge QIC will now have is convincing its investors to pay up for another strategic asset having already secured Tilt.
Working with Origin and CDPQ are Barrenjoey and ICA Partners, while QIC is advised by Bank of America. Credit Suisse and JPMorgan are advising Iberdrola.
CWP Renewables has a portfolio of assets in operation or late-stage construction generating 1.1 gigawatts of power in NSW and Victoria, and a 5GW development pipeline.
Customers include Sydney Airport, Snowy Hydro, Telstra and Transurban, with 70 per cent of revenues contracted to 2030 and average contract lengths of 13 years.
Originally, about 30 parties were in the data room considering an acquisition of the business before first round bids were due in September.
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