Takeover target Origin Energy has departed from the competition to buy the $4bn renewable energy company CWP Renewables, leaving Iberdrola and Tilt Renewables to battle for the business.
CWP Renewables is owned by private equity firm Partners Group.
Final bids were due last Monday, but Origin, which was bidding with Canadian pension fund CDPQ, was late in lobbing its offer as of last week.
It is now understood that the Australian listed energy company will not make the deadline for the contest.
DataRoom understands that Partners Group will hold an internal approval meeting on Tuesday or Wednesday to select a winning candidate in the competition.
This is before either signing up a party towards the end of the week for a deal or providing them with so-called ‘black box’ information and offering exclusive due diligence.
It is believed that Origin Energy, advised by Barrenjoey, was keen to buy CWP Renewables and was gunning hard for the business, and market experts said that Origin needed the business more than its competitors to strengthen its renewable energy portfolio.
But once Origin became subject to a $15.5bn buyout by private equity firm Brookfield and EIG, the situation changed for Origin, where Brookfield needed more time to assess CWP.
CWP’s owner, Partners Group, opted to press on with its original timetable.
Working as an adviser on the sale process is Macquarie Capital.
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 as it wrestles with the introduction of windfall taxes on energy companies in Spain where it is based.
Tilt Renewables has the least financial power, say sources, but the understanding this week is that the business is working furiously on its offer, which may be a signal it is well placed.
QIC purchased Tilt from Infratil last year for a price valuing the business at $3bn.
This was through the PowAR venture, owned by QIC, AGL Energy and The Future Fund.
The purchase was in partnership with Mercury New Zealand, and the winners fended off competition from CDPQ.
The challenge QIC will now have is convincing investors to pay up for another strategic asset having already secured Tilt.
Tilt is advised by Bank of America and Lazard.
Credit Suisse and JPMorgan are advising Iberdrola.
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.
Customers include Sydney Airport, Snowy Hydro, Telstra and Transurban, with 70 per cent of revenues contracted to 2030 and an 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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