By Adam A. Ang

AN AUSTRALIAN unit of electricity utility giant Iberdrola, S.A. presented an A$841 million takeover bid to acquire Australian renewables company Infigen Energy Ltd., beating the A$777 million offer by an affiliate company of Ayala-led AC Energy, Inc.

In a disclosure to the Australian Securities Exchange on Wednesday, Infigen said it entered into a bid implementation agreement with Iberdrola Renewables Australia Pty. Ltd. under which the latter lodges an A$0.86 per share bid to acquire the former.

Infigen noted the offer price represents a 70% premium to its three months volume weighted average price of securities.

Its board unanimously recommended its securities holders to accept the takeover offer, which is 7.5% higher compared to UAC Energy Holdings’s bid of A$0.80 per security.

“The Board unanimously recommends that security holders accept the offer from Iberdrola and each Director intends to accept the offer, or procure acceptance of the offer, in respect of all Infigen securities they control, in each case in the absence of a superior proposal,” the company said.

Iberdrola already gained an upper hand in taking over Infigen as it entered into a pre-bid agreement with Infigen’s biggest security holder London-based The Children’s Investment Fund Management (TCI), which agreed to sell 20% of its shares to the Spanish company if no higher bid emerges.

Its offer is still subject to the Foreign Investment Review Board’s approval and its move to acquire a relevant interest in more than half of Infigen’s securities, among other conditions.

“The offer from Iberdrola follows an extended period of engagement with Infigen regarding potential cooperation or a control transaction,” Infigen said.

Spanish group Iberdrola is one of the biggest global energy players having over 55 gigawatts (GW) of installed capacity in Spain, the United Kingdom, South America, and the United States. It serves around 34 million power consumers worldwide.

Meanwhile, UAC Energy is 75% owned by AC Energy. The remaining 25% is held by UPC\AC Renewables Australia, a joint venture of the Ayala unit and UPC Renewables Australia.

The joint venture is currently developing four renewables projects in Australia.

AC Energy on June 3 said it aspired to take over Infigen to boost its renewables portfolio with a goal to have 50% of its target capacity of over 5 GW to come from renewable sources in the next five years.

UAC Energy holds a 12.82% stake in Infigen.

Infigen said its board was pushing to reject UAC Energy’s offer. Full details on this recommendation will be disclosed next week, it said.

Infigen develops, generates, and sells renewable energy. It owns and operates 670 megawatts of wind farms in Australia, along with gas, battery, and contracted assets.

BusinessWorld reached out to AC Energy for comments but it has yet to respond as of press time. A spokesperson for UAC Energy said the company is “considering its position,” according to a Reuters report.

RELATED ARTICLESMORE FROM AUTHOR