Iberdrola has entered into a bid implementation agreement with Australian renewables developer Infigen.
Iberdrola will make an off market takeover bid for Infigen at a price of A$0.86 (€0.52) per stapled security in cash under the terms of the agreement.
The offer from Iberdrola follows an “extended period of engagement” with Infigen regarding potential cooperation or a control transaction.
Iberdrola is expected to lodge its bidder’s statement with the Australian Stock Exchange and Australian Securities and Investments Commission shortly.
Infigen said Iberdrola’s takeover offer price represents a 69.8% premium to the three month volume weighted average price (VWAP) of Infigen stapled securities, prior to the announcement of a takeover offer by UAC Energy (UAC) on 3 June 2020.
Iberdola’s offer is at a 7.5% premium to the UAC offer, Infigen said.
Iberdrola has informed Infigen that it has entered into a pre-bid agreement with Infigen’s largest security holder, TCI Funds.
TCI Funds has agreed to sell 20% of Infigen stapled securities to Iberdrola no earlier than two months after commencement of the offer subject to approvals being obtained and no superior proposal emerging, or earlier, if TCI Funds’ acceptance would result in Iberdrola having a relevant interest in more than 50% of Infigen stapled securities.
Infigen’s board “unanimously recommended” that security holders accept the offer from Iberdrola.
The company said each director “intends to accept, 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 board stated the offer price represents an “attractive premium” to Infigen’s undisturbed security price, in forming its “recommendation that Infigen security holders accept Iberdrola’s offer in the absence of a superior proposal”.
Iberdrola’s offer is less conditional overall than UAC’s offer, the board said, as it will not subject Infigen to the due diligence and disclosure conditions contained in the UAC offer.
Infigen said Iberdrola is aware of the terms of its debt facilities.
It said Iberdola has advised that if the corporate facility lenders call for a review subsequent to the change in control occurring or require repayment subsequent to the review, Iberdrola will provide an unsecured loan on “arm’s length terms to Infigen, if necessary”.
Full details of the board’s recommendation will be set out in Infigen’s target’s statement.