Meridian said today that the possible trade sale followed several approaches from companies interested in buying all or part of Southern Hydro, which operates renewable energy plants across NSW, Victoria and South Australia. Meridian declined to name the prospective buyers.

Meridian anticipated a two-stage trade sale process to test the value of Southern Hydro. It would soon distribute information memorandums to interested parties that had executed confidentiality agreements. It would then call for indicative offers, with invited parties doing due diligence leading to binding final offers. The whole process would be completed by October.

Meridian chief executive (and Southern Hydro chairman) Keith Turner said that over the past few months he had had several approaches from “a range of companies” that had have recognised the increasing value of renewable energy assets, enquiring whether Meridian would be interested in a full or partial sale of Southern Hydro.

“Our Australian investment has always been about creating extra value for our shareholder,” Turner said.

“We have a medium-term strategy for growing that value organically, but given the level of informal interest shown already it is only prudent to test the market now with a comprehensive and transparent process.

“We have a very clear view of the increasing value path for Southern Hydro over the next few years as it enhances its existing assets and develops new energy projects. Our working assumption is that Meridian will continue to own and develop Southern Hydro, and it will be up to other parties to convince us otherwise with an offer that recognises our view of long-term business value.”

CSFB investment banking director Nick Schiffer said he expected global interest in Southern Hydro.

“It is one of the largest pure-play renewable energy businesses in the world, and has a substantial growth profile and a track record of successful project development,” Schiffer said.

“In the Australian market, Southern Hydro is uniquely positioned to provide capacity insurance products because of its large peak generation capacity and quick start capability.”

Southern Hydro’s 737MW of renewable energy assets include Australia's largest wind farm, the 91MW Wattle Point facility on the Yorke Peninsula of South Australia. Its 646MW of hydro power resources draw from nine separate catchment areas and provide peaking power to the Australian national grid. It also has a range of wind and hydro projects under development.