Origin Energy has hired investment bank Barrenjoey in its quest to buy the $4bn CWP Renewables.
The $10bn Australian listed energy provider will be up against some serious competition in the sales process, with Canadian pension funds like CDPQ competing.
CWP is owned by private equity firm Partners Group and is up for sale through advisory firm Macquarie Capital.
The sales process is set to launch in just over a week, with first round bids likely to be due in August.
Companies like Spanish renewable energy investor Iberdrola are expected to be in the line-up, but some believe APA is likely to be missing from action in the final stretches of the competition.
While the Australian listed pipeline operator may take a cursory look at CWP, experts believe the business will be too big a bet on renewable energy for APA’s conservative board.
DataRoom understands APA is keen to buy Alinta’s West Australian electricity retail business and its Pilbara gas generation unit.
Alinta is up for sale through Goldman Sachs, UBS and Lazard, but most believe only non-coal- related parts of the business will be offloaded.
It remains unclear whether APA is still looking.
CWP is understood to have been marketed internationally to prospective buyers for a prolonged period, with Macquarie Capital undertaking a global roadshow to find suitors.
The Canadian pension fund CDPQ – short for Caisse de depot et placement du Quebec – came very close last year to buying Tilt Renewables, a similar business.
It is taking advice from ICA Partners.
APA was also an underbidder but was far from the winner when it came to price.
CWP is chaired by the former Origin Energy boss Grant King and led by Jason Willoughby.
It is one of the largest renewable energy power producers in Australia.
A price of $4bn could be achieved, judging by the $3bn that was paid for Tilt Renewables last year.
It was sold to AGL Energy, QIC and The Future Fund.
The portfolio currently has assets in operation or late-stage construction generating 1.1 gigawatts of power in NSW and Victoria and a 5GW development pipeline.
The CWP sale comes amid a transition away from traditional sources of energy like coal and gas to wind and solar.
Meanwhile, AGL Energy outed Brookfield as a 2.56 per cent shareholder on Thursday – DataRoom tipped it was holding a minority stake when Mike Cannon-Brookes raided its register in early May.
The understanding is that the Canadian buyout fund and the technology billionaire have parted company and will not join forces for any bid.
Their differing views centre on the timing of shutting down AGL’s coal plants, which Atlassian co-founder Mr Brookes hopes will be done by 2030.
Shutting down coal operations eats away at the company’s value sooner, which means Brookfield would not be able to pay a big price for the asset.
It first looked at AGL in December when shares were $5 – now they are $8.25 amid soaring energy prices linked to domestic power shortages and the Russia-Ukraine conflict.
Market experts believe that the company’s value for a suitor is $10 per share or less.
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