Infratil rejects $3.8b AustralianSuper takeover offer

The superannuation fund's proposal, dated December 8, implied an offer value of NZ$7.43 per Infratil share, which was the closing share price that day for Infratil’s listed subsidiary Trustpower. It represented a 22% premium to Infratil’s closing price on that day.

This was a revision of an offer worth NZ$6.40 per Infratil share proposed by AustralianSuper in October. At that time, the stock was trading at around the NZ$5 mark.

Infratil said its board had rejected both offers unanimously, citing an undervaluation of the project portfolio and unattractive conditions related to foreign investment approvals. It added that there was no plan for further engagement on the matter.

Infratil shares spiked 19% following the offer on December 8 and were trading steady at NZ$6.76 as of mid-afternoon December 11, giving the company a market capitalization of NZ$4.9 billion.

Trustpower shares climbed 6.7% following the offer and were trading at NZ$4.70 as of December 11 in the afternoon. Tilt Renewables, another listed Infratil subsidiary, saw its shares jump 25% to an all-time high of NZ$5.57 on December 9.

HRL Morrison launched Infratil in 1994, touting the business as one of the first listed infrastructure funds globally. It makes investments across energy, transport, data, social infrastructure, and real estate through a portfolio of holding companies and subsidiaries. Morrison continues to act as the manager.

Revenue was down 5% during the 2020 financial year to NZ$1.3 billion, with Infratil citing reduced income from Tilt and Trustpower. Profit surged from NZ$52.4 million to NZ$484.2 million during the same period. This was due largely to the sale of one of Tilt’s wind farms.

Recent activity includes the acquisition of a 60% stake in Australian radiology business Qscan at an enterprise valuation of around $524 million. The transaction, which also saw Morrison take a 15% stake via a separate fund, provided an exit for Quadrant Private Equity.

However, AustralianSuper’s interest in the portfolio and Infratil’s confidence in rejecting the offer has been more closely associated with recent activity in data, connectivity, and renewable power.

Key assets in these areas include a 49.9% stake in Vodafone New Zealand, which was acquired last year in a $2.2 billion deal. Brookfield Asset Management took an interest of equal size. Earlier, Infratil acquired a 48% interest in Australia’s Canberra Data Centres (CDC) for about $285 million, providing another exit for Quadrant.

“Both [AustralianSuper] proposals were unsolicited and materially undervalue our significant renewable energy and digital infrastructure platforms,” Infratil CEO Marko Bogoievski said in a statement. “We expect some of the additional value to be demonstrated in the near term with the recently announced strategic review of Tilt Renewables, which will continue, and ongoing appreciation of the value of CDC Data Centres.”

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• Topics
• Australasia
• Infrastructure
• Buyouts
• New Zealand
• AustralianSuper