Infratil, through its subsidiary Infratil 2018, and Mercury NZ have announced their intention to make takeover offer for Tilt Renewables.
Infratil and Mercury NZ already hold 51.04% and 19.99% stake in Tilt Renewables, respectively. The two companies have offered a price of NZ$2.3 ($1.51), which is claimed to represent 24.3% premium to the closing share price of Tilt Renewables on 11 May this year.
In May, Mercury acquired 19.9% stake in Tilt Renewables from TECT Holdings, a 100% subsidiary of Tauranga Energy Consumer Trust.
Infratil said in a statement: “Infratil is confident that the Board of Tilt Renewables will support the offer, given the premium it represents for minority shareholders relative to recent trading and comparables in the Australian renewables sector as well as the delivery of certain value to Tilt Renewables minority shareholders.”
Currently, Tilt Renewables’ total installed capacity of 637MW across 8 wind farms accounts for about 11% market share of installed wind capacity in Australasia. With a development pipeline of more than 1.6GW of planning approved projects that cover wind, solar and storage technologies, the company is claimed to be well positioned to contribute to continued decarbonisation in Australia and New Zealand.
Tilt Renewables recently submitted a bid to sell the electricity generated from the 336MW Dundonnell Wind Farm to the Victorian Government.
The company intends to construct the wind farm from a funding, which combines new corporate debt and raising significant equity.
Infratil said: “Infratil and Mercury’s offer provides shareholders with the opportunity to sell their Tilt Renewables shares at an attractive price.
“Alternatively, in the event of a successful Dundonnell bid outcome, shareholders will be required to contribute a significant amount of new equity relative to their existing shareholding or be diluted in an equity raising.”
Infratil and Mercury require a funding of NZ$208.54m ($137.3) to acquire the stake that they do not currently own in Tilt Renewables.
The offer is subject to approval from the Australian Foreign Investment Review Board (FIRB).