Iberdrola agrees a friendly takeover bid for Infigen Energy, strengthening its presence in Australia where it is already developing a 320MW hybrid wind and solar energy park
Iberdrola announces recommended cash takeover offer for Australian renewables entity Infigen
- Iberdrola´s new step as a worldwide leader in clean energy through a highly compelling, unanimously recommended cash offer of A$0.86 per Infigen stapled security
- Implementation agreement signed between Iberdrola Australia and Infigen
- The offer is supported by a Pre-Bid Agreement entered into with Infigen's largest shareholders, The Children's Investment Master Fund and CIFF Capital UK LP (“TCI Funds”)
- Infigen is a well-recognized supplier of clean energy in Australia with 670 MW of owned renewables and more than 1GW of pipeline, combined with 268 MW highly valued firming assets and additional 246MW of contracted renewables capacity
- Infigen's commercialization expertise, widely demonstrated with more than 75% of the sales from their operational assets being under long-term contracts, perfectly fits within Iberdrola group's strategy towards stable value creation
Iberdrola Renewables Australia Pty Ltd (“Iberdrola Australia”), a wholly owned indirect subsidiary of Iberdrola, S.A., is pleased to announce its intention to make a takeover bid for Infigen Energy Limited and Infigen Energy Trust (“Infigen”). A takeover bid implementation agreement has been entered into with Infigen Energy Limited and Infigen Energy RE Limited, under which Iberdrola Australia has agreed to make a recommended cash takeover offer of A$0.86 per stapled security for all of the issued stapled securities of Infigen (“Offer”).
The acquisition of Infigen is a unique opportunity for the Iberdrola group to consolidate its presence in the attractive Australian renewable energy market through a friendly transaction. Infigen will allow the Iberdrola group to add critical mass to its existing Australian platform which comprises the 320 MW Port Augusta Renewables Energy Park currently under construction in South Australia, through Infigen's portfolio of 670MW of wind generation assets, 268MW of firming assets, 246MW of additional renewable capacity through offtake PPAs and a strong development pipeline of projects as well as its widely diversified and high quality customer base.
This Offer is the result of a long, friendly relationship between the Iberdrola group and Infigen. Iberdrola Australia strongly believes Infigen provides an attractive platform for future growth and is consistent with Iberdrola group's strategy to become the largest renewable energy player in the world, reaching a total renewable installed capacity of 33 GW.
The Iberdrola group intends to integrate Infigen's operational expertise into Iberdrola group's worldwide footprint. Infigen's contribution, with an EBITDA and a Net Income of A$165.3m (€102.0m) and A$40.9m (€25.2m), respectively, in 2019 (according to Infigen's 2019 Annual Report) is expected to be accretive to Iberdrola group's earnings from the first year onwards.
Compelling Offer for Infigen stapled security holders
The Offer is unanimously recommended by the Infigen Board in the absence of a superior proposal. It implies a diluted equity value of A$840.6 million for Infigen representing compelling cash value for Infigen stapled security holders. The Offer values Infigen at a:
- 7.5% premium to UAC Energy Holdings Pty Ltd's (“UAC Energy”) unsolicited, conditional takeover bid of A$0.80 per stapled security announced on 3 June 2020;
- 45.8% premium to Infigen unaffected share price as of June 2nd 2020; and
- 54.2% premium to the one month volume weighted average share price up until and including June 2nd 2020.
In addition, the most significant shareholders of Infigen, the TCI Funds, which together own 33.1% of Infigen's issued stapled securities have entered into a Pre-Bid Agreement with Iberdrola Australia. Under this agreement, the TCI Funds have agreed to sell 194,139,613 Infigen stapled securities, representing 20% of Infigen stapled securities on issue to Iberdrola Australia no earlier than two months after the commencement of the Offer, conditional on FIRB approval being obtained and subject to the Offer becoming unconditional and upon Iberdrola Australia either having a relevant interest in more than 50% (including the TCI Funds' securities) or where TCI Fund's acceptance of its securities into the Offer, together with acceptances submitted into any institutional acceptance facility, would result in Iberdrola Australia having a relevant interest in more than 50%. The Pre-Bid Agreement includes termination rights, including in certain circumstances if a superior offer emerges which is unmatched by Iberdrola Australia.
Iberdrola Australia will support Infigen seeking any required consents and waivers to any change of control and review event arising from the Offer from financiers to Infigen.
If Infigen's Corporate Facility Lenders:
- Call for a review subsequent to the change in control occurring; or
- Require repayment subsequent to the review,
then if it is necessary, it is Iberdrola's intention to provide an unsecured loan on arm's length terms to Infigen to refinance its Corporate Facility.
The Offer is conditional upon Iberdrola Australia acquiring a relevant interest in more than 50% of Infigen stapled securities (on a fully diluted basis), approval by the Foreign Investment Review Board, no material adverse change, no prescribed occurrences in relation to Infigen, and certain other limited customary market conditions. The Offer is not subject to further due diligence or refinancing and will be funded from Iberdrola group's cash reserves.
Iberdrola Australia has factored into the value of its cash offer of A$0.86 per stapled security that the Directors of Infigen have determined not to pay a distribution in respect of the Infigen stapled securities for the period ending 30 June 2020.
The proposed defeating conditions of the Offer are set out in the Annexure.
Bid Implementation Agreement and Bidders Statement
Infigen has entered into a takeover Bid Implementation Agreement with Iberdrola Australia in respect of the Offer. In addition to setting out the agreed takeover bid terms, the agreement imposes certain requirements on Infigen in respect of the Offer, and certain restrictions on the conduct of Infigen business during the Offer period. The agreement also contains customary exclusivity provisions, and requires Infigen to pay a break fee of 1 % of the equity value of Infigen implied by the Offer (~A$8.4 million) in certain circumstances.
Iberdrola Australia intends to issue its Bidder's Statement shortly. The Bidder's Statement will contain detailed information relevant to the Offer, including how to accept and is intended to be sent to Infigen security holders in due course.
Forward Looking Statements and Disclaimers
This communication contains forward-looking information and statements and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, and statements regarding future performance. Forward-looking statements are statements that are not historical facts and are generally identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates” and similar expressions.
Although Iberdrola Australia believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Iberdrola, S.A. shares are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of either Iberdrola Australia or Iberdrola, S.A., that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the documents sent by Iberdrola, S.A. to the Spanish Comisio?n Nacional del Mercado de Valores, which are accessible to the public.
Forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of either Iberdrola Australia or Iberdrola, S.A. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All subsequent oral or written forward-looking statements attributable to Iberdrola Australia and/or Iberdrola, S.A. or any of their respective members, directors, officers, employees or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included herein are based on information available to Iberdrola Australia and Iberdrola, S.A. on the date hereof. Except as required by applicable law, neither Iberdrola Australia nor Iberdrola, S.A. undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.