Infratil-backed ENE receives another takeover offer(2)

The offer of A$2.80 per share of Energy Developments Limited comes less than a month after the company ceased takeover discussions with Australian private equity firm Archer Capital. The offer also comes from a private equity firm, which Energy Developments did not name.

A renewable energy developer backed by New Zealand infrastructure investor Infratil has received a “non-binding, conditional and incomplete” buyout offer that could be worth upwards of A$430 million (€256 million; $367 million).

Australian Stock Exchange-listed Energy Developments (ENE) said in a statement it is in discussions with a private equity fund regarding a potential transaction to acquire 100 percent of the firm.

The private equity fund, which ENE did not name, has offered an indicative price of A$2.80 per ENE share on a diluted basis, the firm said.

Last month ENE ceased discussions on another buyout proposal from Australian private equity firm Archer Capital, which also offered A$2.80 per share in a revised offer issued in July.

ENE said that, after consultation with its major shareholders, it has invited the private equity fund into an exclusive due diligence process to firm up its proposal, which the firm described as “non-binding, conditional and incomplete”.

Wellington, New Zealand-based Infratil owns approximately 32.1 percent of ENE’s shares and is the firm’s largest shareholder, according to a recent press release.

Infratil has acknowledged that ENE “has struggled to meet expectations in execution of capital projects that add to shareholder value”, according to the website. The green energy producer entered the US market earlier this decade and recently posted a loss for its US operations due to higher-than-expected costs and lower-than-expected electricity output levels.

ENE's fortunes may be turning. The company recently upgraded its 2010 earning guidance for earnings before interest, tax, depreciation and amortisation (EBITDA) to at least A$135 million. The company posted EBITDA of $118.5 million for the year ending 30 June 2009.

ENE also is considering another buyout offer for a smaller piece of its business. Earlier this summer, ENE disclosed that it was in talks with an undisclosed infrastructure fund manager to sell the firm’s UK and French gas power generation assets. ENE said it is evaluating that proposal, valued at £135 million ($217 million; €156 million), in parallel to the full buyout proposal disclosed today and “there can be no assurances the company will reach agreement on terms acceptable to the board”.

ENE shares ended the day down 4.5 percent, closing on A$2.55 per share.