Archer looks to enter renewables(5)

A consortium led by the firm has revised its earlier proposal to buy Energy Developments at an amended price of A$430m. Should the deal complete it would be Archer's first in the renewable energy sector.

A consortium of private equity funds led by Australian private equity firm Archer Capital has proposed to acquire 100 percent of Australia-based Energy Developments at A$2.80 ($2.20; €1.58) per share or approximately A$430 million.

The company owns and operates power stations in Australia, the US, Europe and the UK, using fuel sources including landfill gas, coal mine methane and natural gas and liquefied natural gas.

A spokesman from Energy Developments declined to name the other parties in the syndicate. Archer did not respond to requests for comment at press time.

The proposal is incomplete as it remains subject to conditions such as third party debt and equity funding, which Archer has yet to confirm details of, according to a statement from the company. If the consortium makes a formal bid that is accepted, it would be the firm's first deal in the renewable energy sector.

Archer has a two to three month period to conduct due diligence, as do other parties that have indicated interest in acquiring the company, Energy Developments said.

The current proposal follows on the same consortium’s proposal in June to acquire Energy Developments at a price range of A$2.40 to A$2.80 per share.

Wind farms: private equity target.

In June, New Zealand-based infrastructure investor Infratil granted Archer a call option covering 19.99 percent of Energy Development’s shares. Infratil holds a more than 32 percent stake in the company. An exercise price for the call option has not yet been agreed. The option will only become effective once a price has been agreed upon between Archer and Infratil and a takeover bid is made. Should this happen, Infratil would have the option to sell the balance of its remaining shares to Archer.

In the same month, an “international infrastructure specialist fund manager” offered £135 million ($217 million; €156 million) for Energy Developments’ UK and French landfill gas power generation assets. London-listed private equity firm 3i is the fund manager, according to newspaper The Australian.

Energy Developments is currently in advanced discussions with the unnamed fund manager, whose offer is supported by credit approved financing from banks. The company’s board has not made a recommendation or endorsement towards this offer or the consortium’s proposal, the company said.