Stonepeak’s deal for Jemena still alive but ‘the pulse is weak’

Jemena owns Australian energy infrastructure assets, including gas pipelines and gas and electricity networks in Victoria, NSW, Queensland and the Northern Territory. Picture: Max Mason-Hubers

Negotiations for Stonepeak to buy a 40 per cent stake in Jemena are not officially off but a deal is starting to look increasingly doubtful, say sources.

As earlier reported, Stonepeak has hired JPMorgan and Macquarie Capital to compete for a 40 per cent stake in the $5bn Jemena energy business.

GIP still has a weak pulse in the contest, with a lending syndicate still in place, but most believe it is more or less out, while there has been some suggestions a consortium may surface as interested.

The asset is on Singapore Power’s books for $1.6bn but earlier sale expectations were for a price of around $2bn in the Goldman Sachs-run auction.

Jemena owns Australian energy infrastructure assets, including gas pipelines and gas and electricity networks in Victoria, NSW, Queensland and the Northern Territory.

It is 60 per cent-owned by China’s State Grid and 40 per cent by Singapore Power.

The understanding is that Stonepeak, which counts former Macquarie Capital media and telecoms banker Darren Keogh as a senior managing director, is keen to invest more in Australia and New Zealand and has aspirations to build a portfolio like that of listed infrastructure owner Infratil.

It recently bought New Zealand’s fourth-largest retirement village operator Arvida with a $NZ1.3bn offer and was looking at Global Switch’s Australian assets.

The understanding is that the Chinese owners of Global Switch are struggling to make a decision, with buyers not close to the $2.5bn asking price, said to equate to about 20 times earnings before interest, tax, depreciation and amortisation.

The offers had multiples based in the mid-teens, concerned that the asset was old and without strong growth prospects and with major tenant departures.