Fundraising

IFM, AustralianSuper vie for Ausgrid

The ‘all-Australian’ unsolicited bid is now under review as the New South Wales government prepares to relaunch an auction for Australia’s largest power network.

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A first bidding team has emerged in the soon-to-be-relaunched privatisation of Australia’s Ausgrid after the federal government rejected offers from Chinese suitors last month.   

Melbourne-based fund manager IFM Investors and AustralianSuper, the nation’s largest super fund, have submitted a joint unsolicited bid to the New South Wales government for a 50.4 percent stake in the 99-year lease of the country’s largest electricity network. 

The two investors, which are equal partners in the consortium, argued in a statement that the “all-Australian proposal” was “unique and represents excellent value for the NSW government”. 

Details of the proposal remain confidential, the bidders said, adding that if they are ultimately successful, they intend to manage the asset over the long term. 

Having established a cross-agency panel to review the proposal, the state government, which is preparing to relaunch a competitive process, said that it can receive unsolicited bids at any time and has a procedure in place to assess such offers. 

The final decision will be made later this year as the state seeks to raise at least A$10 billion ($7.62 billion; €6.8 billion) from the Ausgrid sale and use the proceeds to fund the state’s A$20 billion greenfield infrastructure pipeline.
A source familiar with the matter told Infrastructure Investor that another team that is likely looking to bid includes a Canadian pension fund. The source added that the auction was not restricted to Australian investors but that the winning consortium would probably include domestic capital. 

IFM declined to comment, while AustralianSuper and the NSW Treasury could not be reached before press time. 

Last month, Australia Treasurer Scot Morrison blocked bids from the only two suitors in the Ausgrid sale, China’s State Grid and Hong Kong’s Cheung Kong Infrastructure, citing national security concerns. The state government then decided to relaunch the auction, stressing “strong market interest for the valuable asset”. 

IFM, which is owned by 29 Australian superannuation funds, currently manages assets of more than A$72 billion. It has significant infrastructure investments in NSW, including NSW Ports, Interlink Roads, Axiom education and the Eastern Distributor. AustralianSuper manages more than A$100 billion.