Macquarie Bank is facing competition from a consortium comprised of Babcock & Brown and Singapore Power, which issued a A$7.4 billion bid for the company in March 2007. As a result, the investment bank has improved its previously rejected offer in the hope of emerging the winner.
In a press release, Macquarie Bank said that it would offer Alinta shareholders a choice of three consideration options: a full cash option, a full scrip option offering CGT rollover relief, and a third balanced option. According to the Financial Times, the all-cash option could be around A$15.50 per share, and the cash and scrip option could exceed A$16 a share.
Macquarie said that shareholders would be able to choose which option they prefer. The bank also revealed that it has provided underwritings of more than $A1.1billion to support its proposal.
Macquarie has also entered into an agreement with AGL Energy, which will see AGL buy the remaining 67% of the AlintaAGL retail business from Macquarie, should Macquarie successfully acquire Alinta.
Under the agreement, AGL Sales, a wholly owned subsidiary of AGL, will buy the remaining interest in AlintaAGL’s retail business, and will procure that AGL will sell its 33% interest in AlintaAGL’s co-generation assets to Macquarie.
Although Alinta had entered into a scheme implementation agreement with Babcock & Brown and Singapore Power, the company said that, having received the revised offer from Macquarie Bank, its directors believe that they are obliged to consider the competing proposal.
As a result, Alinta’s directors are seeking further information and clarification regarding the proposal. Alinta said that it has been granted a trading halt in Alinta securities while it considers the proposal and its response.
According to Bloomberg, Babcock & Brown and Singapore Power are now discussing the possibility of revising their bid in retaliation.
