The world’s largest producer of wind power, Iberdrola, is shaping up as a frontrunner to buy Infratil’s $1.2bn stake in Tilt Renewables should the stake be offloaded.
Tilt owns wind and solar farm assets in Australia and New Zealand. Interest from the Spanish renewable energy giant comes as Iberdrola looks to lift its exposure to the Australian market at a time when the sector is in hot demand.
New Zealand-based infrastructure investor Infratil has launched a strategic review of its 65.6 per cent stake in the company for a potential sale.
The review follows approaches to Infratil by AustralianSuper, which this month hoped to buy the business for $5.1bn.
Infratil said its bid materially undervalued its assets and rejected the offer.
But some of its largest shareholders are understood to be supportive of the offer, believing it to represent good value at a 28 per cent premium to its last closing share price.
Many experts in the market believe AustralianSuper will return to the negotiating table with a higher bid, leaving the future of Tilt largely hinging on whether the superannuation giant eventually gains control of the company managed by Morrison & Co.
Market experts say the question is whether AustralianSuper returns with a higher offer this year or next.
Goldman Sachs is working as a defence adviser for Infratil.
Tilt Renewables has a market value of $1.95bn, but its value has increased since the start of this month, as news emerged that AustralianSuper was a suitor for Infratil.
Some say the company is expensive and Iberdrola does not need to own the stake.
However, Iberdrola has been active in the Australian market this year. The Spanish group made a $893m bid for Infigen Energy, which was backed by the company.
Should it buy the 65 per cent interest in Tilt Renewables, Iberdrola could then launch a takeover offer for the remainder of the company, adding to its global assets under ownership, which are worth at least €122bn ($197bn).
Some suspect that Tilt would appeal to global energy majors such as Shell or BP as such groups turn their attention to renewable energy assets.
Tilt has hired Lazard to provide defence advice.
Other potential buyers are AGL Energy or Origin Energy.
Origin last month said its investment pipeline would centre around opportunities in renewable energy.
Its plan comes as the NSW government announced a $32bn scheme to turbocharge clean energy this year.
Several renewable energy assets are on the market amid strong demand from infrastructure investors and while coal is out of favour.
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