Spark agrees $5.2bn takeover from KKR, Ontario Teachers’ Pension Plan Board and PSP
Spark Infrastructure has accepted a $5.2bn takeover bid from a consortium led by KKR, signalling the end of its 16-year run listed on the ASX.
Spark Infrastructure has accepted a $5.2bn takeover bid from a consortium led by KKR, signalling the end of its 16-year run listed on the Australian Stock Exchange.
The electricity infrastructure investor had engaged with KKR, Canada’s Ontario Teachers’ Pension Plan Board and PSP after they lobbed a $2.95 a share bid, opening its books for four weeks of due diligence on a non-exclusive basis and keeping the door open should any rival bids emerge.
Spark on Monday recommended security holders vote in favour of the buyout deal, which gives it a $10.1bn enterprise value, and said it had worked for several months to get strong value from its suitors.
The Sydney-based company, which listed in 2005, had knocked back two previous bids of $2.70 and $2.80 a security.
“The board and management have engaged constructively with the consortium over several months to secure additional value beyond the initial approach,” Spark chairman Doug McTaggart said.
Spark owns stakes in $17bn of network assets across three states, including distribution in South Australia, western Victoria and the Melbourne CBD as well as a stake in NSW transmission business TransGrid.
The $2.95 offer is 9 per cent above KKR and Ontario’s opening offer of $2.70 per share. Canadian pension fund PSP joined the consortium on August 10.
Spark has recently outlined growth options, with plans for a renewable energy hub in south-west NSW with capacity of up to 2500 megawatts, nearly matching the size of Australia’s biggest coal plant.
The Dinawan Energy Hub would combine wind, solar and battery storage and would help to offset the impact of coal-fired plants closing over the coming years, according to the company.
Low global interest rates and cheap debt have investors and superannuation funds on a fresh hunt for infrastructure assets that can deliver steady returns over the long term.
The Spark deal underlines major interest by investors in gaining access to the broader infrastructure sector following a $22bn bid for Sydney Airport and a $8.8bn tilt for Boral by Kerry Stokes’ Seven Group.
KKR has previously linked up with Ontario to take a major stake in Finnish electricity company Caruna.
The duo, along with partner Queensland Investment Corp, are also in the race to buy a 70 per cent interest in Optus’s $2bn Australian telecommunication tower portfolio.
Spark shares rose 1.8 per cent to $2.82 on Monday.
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