Further details are emerging about the CWP Renewables contest outcome after billionaire Andrew Forrest came from left field on Wednesday to buy the country’s largest renewable energy generator for $4bn.
Sources have told DataRoom that Dr Forrest’s Squadron Energy paid between $4bn and $4.1bn for the business, and next behind him in the competition was the world’s largest renewable energy company, Iberdrola.
The Spain-based Iberdrola was understood to have offered a price $300m lower than Squadron.
There is a suggestion that Iberdrola was to be asked to reconfirm its bid to determine whether it could top Dr Forrest’s offer.
But sources have indicated that the billionaire, who amassed his fortune through iron ore producer Fortescue, had the regulatory approvals in place, – unlike Iberdrola, which did not have approval from the Australian Competition and Consumer Commission, and the Foreign Investment Review Board.
CWP’s owner, Partners Group, was focused on executing a deal with the most limited amount of risk.
Sources say Tilt Renewables, which counts AGL, QIC and The Future Fund as its major investors, did not lob a final offer.
DataRoom understands that holding Tilt back was difficulties with AGL Energy.
AGL has had a problematic year after facing opposition from activist investor Mike Cannon-Brookes, who has battled with the company over its board composition and a proposed demerger of its coal assets.
AGL recently elected Kerry Schott, John Pollaers and Christine Holman on to the board at the request of Mr Cannon-Brookes, along with Mark Twidell, who AGL had recommended.
Mr Cannon-Brookes’ Grok Ventures owns 11.3 per cent of AGL.
It is also understood that one of Tilt’s investors that holds 10 per cent of the company had withdrawn support for buying CWP
Origin Energy had been bidding early on for CWP Renewables with Canadian pension fund CDPQ but became subject to a $15.5bn buyout by Brookfield and EIG.
After initially being suggested as the consortium most likely to win the competition, Origin and CDPQ also did not lob a final proposal after being short-listed in the race.
It is understood that while Origin was highly motivated to carry out the transaction, CDPQ became hesitant about buying a business with a new partner that would now be Brookfield rather than Origin itself, given Origin was soon to fall into Brookfield’s ownership.
Yet, perhaps they will have a second chance. Dr Forrest has indicated he was keen to sell down CWP to superannuation funds over time to fund future development.
CWP Renewables has a portfolio of assets in operation or construction generating 1.1GW of power in NSW and Victoria, and a 5GW development pipeline.
Its portfolio is skewed to NSW and the business has $150m of cash.
The annual earnings before interest, tax, depreciation and amortisation were believed to be about $250m.
Final bids for CWP were due almost two weeks ago in the contest run by Macquarie Capital.
CWP’s customers include Sydney Airport, Snowy Hydro, Telstra and Transurban, with 70 per cent of revenues contracted to 2030 and an average contract length of 13 years.
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