AustralianSuper makes a $ 5 billion acquisition for Infratil

Australia’s largest retirement fund has made a tender offer for New Zealand’s Infratil, which owns half of Vodafone NZ, a majority stake in Wellington International Airport and local energy assets.

AustralianSuper’s offering values ​​the NZX-listed infrastructure investor at $ 5.37 billion and carries a premium of $ 1.35 per share to Infratil’s closing price on the NZX.

The proposal is a non-binding offer through a Scheme of Agreement to acquire all of Infratil’s shares, with a component covering Infratil’s majority stake in Trustpower.

The offer would leave Infratil’s stake in Trustpower with existing shareholders, paying $ 5.79 in cash and distributing 0.2210 Trustpower shares per Infratil share.

The offer represents a 28.1 percent premium over Infratil’s closing price on Friday of $ 5.80.

AustralianSuper said it believed the proposal, if implemented, would unlock significant value for Infratil shareholders and that it “seeks engagement” with Infratil’s board of directors in relation to the proposal.

Representatives for Infratil, founded by the late Lloyd Morrison, were not available to comment to the Herald at the time of publication.

AustralianSuper Infrastructure Director Nik Kemp said AustralianSuper, one of the world’s largest infrastructure investors with a global portfolio of A $ 20 billion, was attracted to Infratil’s portfolio of high-quality infrastructure assets in New Zealand and Australia.

“AustralianSuper currently has NZ $ 1.3 billion invested in New Zealand, reflecting our long-term confidence in this market.

“As a long-term, well-capitalized investor, we see significant potential to invest in the long-term growth of Infratil’s assets on behalf of AustralianSuper members, enabling us to deliver significant value to Infratil shareholders today.” Kemp said in a statement. .

“We believe that our proposal, if implemented, would generate an attractive premium for Infratil shareholders,” Kemp said.

AustralianSuper will continue to seek engagement with the Infratil Board to pay
Infratil shareholders have the opportunity to evaluate our proposal in its entirety, “Kemp said.

Furthermore, Infratil, which is managed by Morrison and Co, has its stake in the NZX-listed Australian wind farm company Tilt Renewables, pending review. At current prices, Tilt’s stake is worth more than $ 1 billion.

Infratil’s portfolio comprises a number of premier infrastructure assets in New Zealand, Australia and the Northern Hemisphere.

It has a 51 percent stake in Trustpower, which owns and operates 22 hydroelectric plants.

Last year, the company was part of the consortium that bought Vodafone New Zealand for $ 3.4 billion.

Infratil’s latest semi-annual result showed strong contributions from Vodafone NZ and Canberra’s CDC data centers.

Proportionate earnings before interest, taxes, depreciation and changes in financial instruments (before incentive commissions) of $ 229.5 million in the six months through September.

This was up from $ 204.2 million in the corresponding prior period.

Results for the period were affected by portfolio changes, including the acquisition of Vodafone NZ in 2019 and the sale of Perth Energy, NZ Bus and ANU’s Student Accommodation business in 2019, among others.

The company has forecast a proportionate ebitdaf for the full year through March 2021 of between $ 430 million and $ 470 million, including an estimated reduction of $ 80 million caused by restrictions related to Covid-19, compared to $ 446 million for the last year.

Infratil invests mainly in energy, transport and social infrastructure companies.

“Within those sectors, the priority is that companies have the opportunity to grow, so that if they are well managed they can invest additional capital to improve profits and valuations,” says the company’s website.

Matt Goodson, managing director of the Salt Funds, said Morrison and Co’s attitude to the proposal would be interesting.

He added: “An independent report in an acquisition situation will be complex, given the variety of holdings of Infratil.”

Oliver Mander, executive director of the New Zealand Shareholders Association, said that if the proposal goes ahead, it would mean another unwanted exclusion from an already tight local market.

“Like other investors, we are surprised by the offer,” Mander said.

“Infratil is attractive both as an investment in infrastructure and because of its exposure to green energy, its interests in Longroad and Tilt (the US wind and solar company).

“Both positions are sought by investors either as a defensive position or to reflect the current growth in demand for green energy around the world,” Mander said.

“The offering at first glance appears to be complicated by the distribution of Trustpower shares and by the recently announced review by Infratil of its stake in Tilt Energy,” he said.

“That may mean that retail investors and other shareholders may require more information.”

Among its other assets, Infratil has a significant portfolio of commercial real estate, Australian retirement villages and a 40 per cent stake in Swiss green energy company Galileo.

Infratil was one of the first listed infrastructure funds in the world when it was listed on the NZX in 1994. The company is owned by primarily institutional investors.