The Perth-based company yesterday said it was not in shareholders’ interests to pursue a bid while it was considering a $6 billion management buyout proposal designed to take the company private and seeking rival bids from third parties.
“Alinta’s aim for the short-term is twofold – to provide stability and certainty for any parties who may be interested in putting a proposal to the company; and to focus on the core business, its many organic growth opportunities and in bedding down the integration of the former AGL business,” acting chief executive Peter Magarry said.
Origin announced in November that it was reviewing its ownership of its networks business, which includes a 17% interest in Envestra and a 33.3% stake in the SEA gas pipeline.
That led Alinta to begin discussions with the Australian Competition and Consumer Commission in December to ascertain its views on any competition concerns that might arise should Alinta proceed with a bid.
On January 9, the same day the MBO was revealed, the ACCC revealed it had begun public market inquiries into the potential acquisition.
But Magarry said Alinta yesterday wrote to the ACCC asking it to cease those inquiries, as the company would not be pursuing a bid.
The proposed MBO generated controversy when Macquarie Bank became adviser to the buyout group and considered participating in it while also being employed as Alinta’s adviser.
Macquarie later pulled out of from working with the MBO group because it was perceived to be a major conflict of interest, but Alinta also fired it as its adviser.
There is speculation that Australian investment bank Babcock & Brown, Singapore Power subsidiary SP AusNet and Spark Infrastructure could be considering bids for Alinta.
In a letter to shareholders, Alinta yesterday said it was yet to receive any formal proposals from any party to acquire its interests.
The utility said the board had initiated a process to solicit proposals and to ensure a “fair and transparent” process to manage bidders proposing to acquire all or part of Alinta.
The board was also putting in place protocols with Macquarie to protect Alinta’s information and provide confidence to other potential bidders as to the competitive nature of the process.
“Be assured that the directors are very mindful of their legal and other obligations,” Alinta said in the letter.
“Your directors are particularly concerned to achieve an outcome that is in the best interests of all shareholders and to this end have been meeting on an almost daily basis to address and manage the situation which has arisen.”
