Philippine conglomerate Ayala bids for $536 mil. takeover of Australian renewable energy firm

04, Jun. 2020

A view of Starfish Hill Wind Farm in South Australia (Photo by Alex Eckermann on Unsplash)
A view of Starfish Hill Wind Farm in South Australia (Photo by Alex Eckermann on Unsplash)

NNA, MANILA – A group backed by Philippine conglomerate Ayala Corp. is bidding to acquire Australian renewable energy firm Infigen Energy Ltd. for A$777 million ($536 million) as part of its broader regional growth.

UAC Energy Holdings Pty. Ltd., which is owned mainly by Ayala’s AC Energy Inc., announced Wednesday it intends to make an all cash takeover bid of A$0.80 per share of Infigen.

The offer is “particularly attractive” amid electricity price falls and Infigen’s “relatively high” debt servicing costs, UAC said in a statement Wednesday. Infigen has also suspended investment in some projects and will defer delivery of a “development pipeline,” the statement said.

Infigen generates and sells energy via 670,000 kilowatts of wind farms in Australia. UAC already has a 12.82 percent stake in Infigen, worth about or A$90.4 million ($62.3 million).

Infigen said in a statement Wednesday it was weighing a response to the UAC’s “off-market” bid and advised its shareholders for now to hold off taking any related action.

UAC Chairman Anton Rohner said the bid fits with a company strategy for renewable energy investments.

“We have ready access to capital and significant renewable energy expertise that will position us well to support Infigen’s pipeline of projects and focus on much needed renewable energy investment and associated employment in Australia,” he said in the statement.

Ayala’s energy arm has more than 1.8 million kws of power capacity between current operations and construction projects. It operates in the Philippines, Indonesia and Vietnam. AC Energy has set a target generating at least 50 percent of its energy from renewable sources by 2025.

Ayala expects the bidding process to take months, and the Australian Foreign Investment Review Board would need to give it final approval.

AC Energy holds 75 percent stake in UAC and UPC/AC Renewables Australia holds 25 percent. UPC/AC Renewables Australia is a joint venture between AC Energy and UPC Renewables Group.

“The acquisition of interest in Infigen by UAC strengthens both AC Energy’s and UPC\AC’s commitment to provide low-cost power in Australia by expanding its operating portfolio and enabling the sale of energy through retail channels,” AC Energy said in a statement.