The Straits Times, March 30, 2007
SingPower joined forces with Australia's second-biggest investment bank Babcock & Brown to mount the buyout.
A GROUP led by Singapore Power has won a ferocious A$13.9 billion bidding war to land Australia's biggest energy infrastructure firm.
The deal to snap up Perth-based Alinta is the largest utility buyout in Australia and one of the biggest overseas deals ever done by a Singapore firm.
It is also a slap in the face for giant Australian bank Macquarie, which had been chasing the firm since January.
Macquarie even upped its offer early on Friday morning - after Alinta had already signed the sale agreement - in a last-ditch effort to foil the SingPower deal.
SingPower, which is keen on expanding into the region, joined forces with Australia's second-biggest investment bank Babcock & Brown to mount the buyout.
They will acquire gas pipelines in Queensland and New South Wales, distribution networks and an asset management unit.
SingPower chief executive Quek Poh Huat said the deal is a very strategic acquisition.
'We continue to believe that there is still strong growth potential in the Australian energy market,' said Mr Quek.
'Besides a strong fit between Alinta's ... pipes businesses with our existing portfolio in Australia, the addition of these businesses will also provide geographical and sector diversification to our portfolio in Australia.
'They will also provide us with a footprint in Queensland and New South Wales.'
It already has a strong presence in Victoria's utility market after its 2004 purchase of TXU Australia for A$5.1 billion - its largest deal down under until Friday's coup.
SingPower also holds 51 per cent of SP AusNet, a subsidiary that invests in utility infrastructure in Australia.
Alinta, with a market capitalisation of about A$7 billion, said on Friday it would recommend SingPower's offer, and reject the one from Macquarie.
Alinta chairman John Akehurst said in a statement that his 'board has concluded that the [SingPower] consortium has made the superior proposal, following an open and competitive tender process'.
The SingPower team offered Alinta A$7.4 billion in cash and stock. This amounts to A$15 a share, 3.3 per cent higher than the stock's closing price yesterday. The consortium will also assume debts of A$6.5 billion.
Alinta shareholders will get A$8.50 in cash for each share plus shares in Babcock & Brown Infrastructure Group, Babcock & Brown Power and Babcock & Brown Wind Partners.
SingPower will put up A$8.6 billion of the purchase price with the deal expected to be completed by July.
Macquarie had offered A$15.45 a share - at first glance a better deal than the SingPower one but built-in default clauses and other complexities concerned the Alinta board.
'While it will be sad to see the end of Alinta as a listed company, the consortium's offer is an attractive one,' Mr Akehurst said.
Alinta had invited bids in January after gettSingPowing a proposal for a management buyout backed by Macquarie.
Analysts say Singapore Power's acquisition is in line with its regional expansion strategy, formed following the Government's plans to free up the local electricity market.
The acquisition by the SingPower consortium dwarfs other overseas ventures by Singapore firms.
SingTel shelled out US$9.7 billion for Australia's Optus in 2001, while local lender DBS paid US$5.4 billion for Hong Kong's Dao Heng Bank, now DBS Hong Kong.
Port operator PSA International bought a 20 per cent stake in the port arm of Hong Kong's Hutchison Whampoa last April for US$4.4 billion.
SingPower joined forces with Australia's second-biggest investment bank Babcock & Brown to mount the buyout.A GROUP led by Singapore Power has won a ferocious A$13.9 billion bidding war to land Australia's biggest energy infrastructure firm.
The deal to snap up Perth-based Alinta is the largest utility buyout in Australia and one of the biggest overseas deals ever done by a Singapore firm.
It is also a slap in the face for giant Australian bank Macquarie, which had been chasing the firm since January.
Macquarie even upped its offer early on Friday morning - after Alinta had already signed the sale agreement - in a last-ditch effort to foil the SingPower deal.
SingPower, which is keen on expanding into the region, joined forces with Australia's second-biggest investment bank Babcock & Brown to mount the buyout.
They will acquire gas pipelines in Queensland and New South Wales, distribution networks and an asset management unit.
SingPower chief executive Quek Poh Huat said the deal is a very strategic acquisition.
'We continue to believe that there is still strong growth potential in the Australian energy market,' said Mr Quek.
'Besides a strong fit between Alinta's ... pipes businesses with our existing portfolio in Australia, the addition of these businesses will also provide geographical and sector diversification to our portfolio in Australia.
'They will also provide us with a footprint in Queensland and New South Wales.'
It already has a strong presence in Victoria's utility market after its 2004 purchase of TXU Australia for A$5.1 billion - its largest deal down under until Friday's coup.
SingPower also holds 51 per cent of SP AusNet, a subsidiary that invests in utility infrastructure in Australia.
Alinta, with a market capitalisation of about A$7 billion, said on Friday it would recommend SingPower's offer, and reject the one from Macquarie.
Alinta chairman John Akehurst said in a statement that his 'board has concluded that the [SingPower] consortium has made the superior proposal, following an open and competitive tender process'.
The SingPower team offered Alinta A$7.4 billion in cash and stock. This amounts to A$15 a share, 3.3 per cent higher than the stock's closing price yesterday. The consortium will also assume debts of A$6.5 billion.
Alinta shareholders will get A$8.50 in cash for each share plus shares in Babcock & Brown Infrastructure Group, Babcock & Brown Power and Babcock & Brown Wind Partners.
SingPower will put up A$8.6 billion of the purchase price with the deal expected to be completed by July.
Macquarie had offered A$15.45 a share - at first glance a better deal than the SingPower one but built-in default clauses and other complexities concerned the Alinta board.
'While it will be sad to see the end of Alinta as a listed company, the consortium's offer is an attractive one,' Mr Akehurst said.
Alinta had invited bids in January after gettSingPowing a proposal for a management buyout backed by Macquarie.
Analysts say Singapore Power's acquisition is in line with its regional expansion strategy, formed following the Government's plans to free up the local electricity market.
The acquisition by the SingPower consortium dwarfs other overseas ventures by Singapore firms.
SingTel shelled out US$9.7 billion for Australia's Optus in 2001, while local lender DBS paid US$5.4 billion for Hong Kong's Dao Heng Bank, now DBS Hong Kong.
Port operator PSA International bought a 20 per cent stake in the port arm of Hong Kong's Hutchison Whampoa last April for US$4.4 billion.
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