PEP raises Energy Developments bid to $394m

Pacific Equity Partners has raised its all-equity offer by roughly $15m for the renewable energy provider. It needs to win over a further 8% of shareholders for the deal to proceed.

Pacific Equity Partners, Australia’s largest private equity firm, has offered to acquire all of Energy Developments’ shares for a consideration of A$431 million ($394 million; €262 million), A$16 million more than the offer it made in mid-October.

Pacific Equity Partners intends to fund the offer with 100 percent equity, leaving Energy Developments’ corporate debt facilities in place should its offer be successful.

The offer has been made through portfolio company Greenspark Power. This time around, the private equity firm is offering A$2.75 per share, A$0.10 per share more than its offer in October which was rejected as being “neither fair nor reasonable” after advice from independent expert Lonergan Edwards & Associates.

In a statement to the Australian Securities Exchange, Energy Developments said the latest offer “still represents inadequate consideration for the acquisition of a controlling stake in the company”.

Pacific Equity Partners’ offer has received the support of shareholders holding a stake of 42.4 percent in the company. The offer conditions include a minimum acceptance condition of 50.1 percent.

Infratil, the largest shareholder in Energy Developments, is backing the offer. The company has agreed to sell a 19.9 percent stake to Greenspark. “Infratil believes that A$2.75 per share represents fair value for ENE and its shareholders,” Marko Bogoievski, chief executive officer of Infratil, said in a statement.

Infratil has also said it intends to accept the offer for its remaining 12.5 percent stake in the absence of a superior proposal. Other institutional shareholders representing a further 10 percent of shares in the company have indicated the same.

In September, Energy Developments said it received a buyout offer that could be worth upwards of A$430 million without naming the private equity firm. A month prior to that, the company ceased discussions on another buyout proposal from Australian private equity firm Archer Capital, which offered A$2.80 per share in a revised offer issued in July.

Energy Developments’ shares were last trading at A$2.41 before a trading halt.