Macquarie consortium tipped to win Endeavour Energy stake

Macquarie Group and its backers were being tipped last night as the consortium likely to win a $4 billion stake in Endeavour Energy.

The 50.4 per cent stake in the electricity distribution business owned by the NSW government is expected to sell for about $4bn, and Macquarie’s pole position was exclusively revealed last night by DataRoom online.

Some sources say the winning consortium will be announced today.

Macquarie Group’s backers include AMP Capital, the Qatar Investment Authority, APG of The Netherlands and Canada’s British Columbia Investment Corporation.

The consortium has been going head to head with a rival group that includes Hastings Funds Management, Spark Infrastructure, Caisse de depot et placement du Quebec, Abu Dhabi’s Tawreed Investments and the Kuwait Investment Authority’s Wren House.

Winning Endeavour would be a major for Macquarie after it was outbid for TransGrid by Hastings and its backers in 2015. They paid $10.3bn for the electricity transmission network.

At that time, Macquarie was working with China’s State Grid.

The state’s Ausgrid electricity distribution business was won by an Australian consortium that Macquarie advised.

The finalisation of the Endeavour Energy sale will end a lucrative pipeline of work for investment banks Deutsche and UBS, which have advised the government on all three of its electricity asset sales since 2015.

The sales will help the state government pay for much needed infrastructure projects including the construction of the WestConnex Sydney motorway network, which will also be partly funded by the private sector.

Investment banks are expected to find out soon whether they have won the mandate to sell part of the $16bn-plus project, after Goldman Sachs recently completed a scoping study.

Final bids for Endeavour were due at the beginning of this month after a hard-fought contest that had earlier seen the Queensland Investment Corporation and AMP Capital bidding together.

But after QIC opted to walk away from Endeavour, AMP teamed with Macquarie, resuming some initial discussions it had early on about working together, as revealed by this column.

Endeavour’s regulated asset base takes its overall value to about $6bn and analysts have predicted that any successful buyer would need to pay 1.4 times its RAB.

Macquarie’s likely acquisition of Endeavour will come as a blow to various investment banks.