Another consortium, comprising Hong Kong’s Cheung Kong Infrastructure, Wesfarmers and Goldman Sachs, pulled out of the bidding war just before the deadline last Friday.
Perth-based Alinta today said it had signed a scheme implementation agreement under which its shares would be valued at $15 each.
In a statement to the Australian Stock Exchange, the company said its directors intend to recommend shareholders vote in favour of the proposed scheme of arrangement in the absence of a superior proposal and subject to an independent expert analysis.
Under the proposed deal, Alinta shareholders would receive $8.50 in cash per share, 7.83 Babcock & Brown Infrastructure securities, 3.31 Babcock & Brown securities and 1.3 Babcock & Brown Wind securities for every five Alinta shares.
The company’s shareholders will also receive an in specie distribution of 1.51 Australian Pipeline Trust units or equivalent for every five Alinta shares.
Chairman John Akehurst said the two proposals were compared against possible internal restructuring alternatives but the Babcock & Brown offer was deemed superior.
“The Board received proposals to acquire the company from two consortia and has been in negotiation with them over the last six days,” Akehurst said.
“There has been a thorough and rigorous evaluation in which due regard has been given to the value of the considerations offered and to the conditions and risks associated with the proposals.
“The proposals were also compared against possible internal restructuring alternatives.
“The Board has concluded that the B&B/SPI consortium has made the superior proposal, following an open and competitive tender process.”
Alinta said shareholders and option holders are expected to meet in July to approve the proposed scheme.
Babcock & Brown chief executive Phil Green said the company was able to structure a “unique” offer, which delivers benefits to all stakeholders through its partnership with Singapore Power.
“The transaction delivers Babcock & Browns specialised funds and asset management platform access to high quality, strategically important assets which are complimentary to existing asset portfolios and deliver significant scale and synergies,” Green said.
The Babcock & Brown managed funds that form part of the consortium are Babcock & Brown Infrastructure, Babcock & Brown Power and Babcock & Brown Wind Partners (BBW).
“The cash generative nature of the assets will allow the funds to continue to focus on a strong cash distribution profile,” he said.
Green said Babcock & Brown’s offer gives Alinta shareholders a 39% premium to its 30-day volume weighted average share price.
BBW said it would be acquiring Alinta’s interest in the Wattle Point Wind Farm in South Australia as a result of the consortium’s bid.
BBW has agreed to acquire Alinta’s interest in the wind farm by issuing 130.1 million new stapled securities to Alinta shareholders and $9.5 million in cash.
Wattle Point wind farm, which began operating in 2005, consists of 55 Vestas V82 1.65 megawatt wind turbines with a total installed capacity of 91MW.
A $6 billion management buyout proposal led by former Alinta chief executive Bob Browning in January sparked the bidding process for the energy infrastructure group.
Later that month Alinta also decided not to bid for the infrastructure assets of rival Origin Energy, concentrating instead on seeking and assessing takeover offers and integrating recent acquisitions.
At the time it said it was not in shareholders' interests to pursue a bid while it was considering the MBO designed to take the company private and seeking rival bids from third parties.
