Dexus in box seat for Powerco; Blackstone favourite for AirTrunk

Dexus is poised to exercise pre-emptive rights to buy an additional $1bn stake in New Zealand’s energy distributor Powerco. Picture: AAP

The $7.6bn listed real estate and infrastructure group Dexus is poised to exercise pre-emptive rights to buy an additional $1bn stake in New Zealand’s energy distributor Powerco as investors managed by Queensland Investment Corporation remain keen for an exit.

Powerco is 42 per cent owned by Dexus, which inherited the asset after taking over AMP infrastructure interests, and QIC-managed funds control the remainder.

It is understood that 33 per cent is on offer, with adviser Barrenjoey on board.

However, the understanding around the market is that outsiders needn’t inquire, because existing owners that have the first right to buy any shares in the business that come up for the sale are keen to increase their interests.

Still, flyers are circulating in the market.

Powerco generates $NZ263m of annual earnings before interest, tax, depreciation, amortisation and fair value adjustments.

The replacement asset value is $NZ3.1bn and assets typically sell for 1.3 times their RAV, which could make a deal worth more than $NZ1bn before factoring in debt.

Dexus is advised by the Royal Bank of Canada and while it’s considered to be in pole position to land the acquisition, another possibility is that one of QIC’s other funds could snap up a stake instead.

Still, the bottom line is that it all looks like it will be happening in house and most believe that the stake is Dexus’s for the taking.

Yet while big infrastructure investors may not have an opportunity to gain exposure to the New Zealand energy sector through Powerco, there’s plenty of work happening on data centre giant AirTrunk.

The data room was understood to have opened for the sale process of AirTrunk on Friday, giving suitors the opportunity to gain further insight into the $5bn data centre provider.

All eyes continue to be on Blackstone, the contest favourite, which is advised by Morgan Stanley.

An additional bank is expected to be appointed at a later stage to provide funding for a transaction.

With respect to other bidders, consortiums are expected to form to compete for the asset, with those expected to line up being GIP, KKR, IFM and AustralianSuper.

Working on the sale are investment banks Goldman Sachs and Macquarie Capital.

It is understood that on offer is over 50 per cent of the business that is partly owned by Macquarie Group, PSP and Robin Khuda.

AirTrunk has over 1.4 gigawatts of announced data centre capacity across 11 sites and a pipeline for further capacity. It is considered the best-in-class hyperscale data centre platforms for large cloud, content and enterprise customers across the Asia-Pacific.

It operates in Japan, Malaysia, Hong Kong, Australia and Singapore.