Infratil rejects takeover NZ$5.4bn bid from AustralianSuper

The dual-listed company, launched and managed by Morrison & Co, says AustralianSuper’s offer materially undervalues its portfolio.

Listed infrastructure platform Infratil has rejected an indicative, non-binding NZ$5.4 billion ($3.8 billion; €3.1 billion) takeover bid for the company from AustralianSuper.

Australia’s largest superannuation fund confirmed it had made an offer of NZ$7.43 per share for Infratil, which is listed in both New Zealand and Australia.

The offer comprised a cash consideration of NZ$5.79 per share and a distribution of shares in the separately listed company Trustpower. The latter, an electricity generator and retailer, is also listed in New Zealand, and Infratil is a major shareholder – its shareholding there would be distributed among existing Infratil shareholders on a pro rata basis should the transaction proceed, at a rate of 0.2210 Trustpower shares per Infratil share.

Infratil today revealed that this was AustralianSuper’s second offer for the company, after it initially offered a cash consideration of NZ$4.69 per share in October alongside the same in specie distribution of Trustpower shares, implying a total offer value of NZ$6.40 per share.

This was raised to the current level on 27 November, representing a 22 percent premium to Infratil’s closing price on 8 December.

In a statement, Infratil said its board had “unanimously rejected” both proposals because they materially undervalued its portfolio of assets on a control basis. It also noted there would be material conditions related to Foreign Investment Review Board and NZ Overseas Investment Office approvals, and that the distribution of Trustpower shares as proposed would avoid recognising a control premium and avoid the need to make a takeover offer for that business.

The board said it would consider any offers to maximise shareholder value but anticipated no further engagement over the AustralianSuper proposal.

The firm announced on 7 December that it would undertake a strategic review of its shareholding in the NZX and ASX-listed Tilt Renewables, in which it owns a 65.5 percent stake, because “strong demand for high-quality renewables platforms globally” had made it “prudent to assess alternatives for [Infratil’s] Tilt shareholding, including divestment of its position”.

Infratil chief executive Marko Bogoievski said: “Both proposals were unsolicited and materially undervalue our significant renewable energy and digital infrastructure platforms. We expect some of the additional value to be demonstrated in the near term with the recently announced strategic review of Tilt Renewables, which will continue, and ongoing appreciation of the value of CDC Data Centres”.

In a statement published before Infratil announced its rejection of the proposal, AustralianSuper head of infrastructure Nik Kemp said: “AustralianSuper currently has NZ$1.3 billion invested in New Zealand, reflecting our long-term confidence in this market. As a well-capitalised and long-term investor, we see significant potential to invest in the growth of Infratil’s assets over the long term on behalf of AustralianSuper’s members, which allows us to provide significant value to Infratil shareholders today.

“We believe our proposal, if implemented, would deliver an attractive premium for Infratil shareholders. AustralianSuper will continue to seek engagement with the board of Infratil to afford Infratil shareholders the opportunity to assess our proposal in full.”

AustralianSuper had no further comment to make following Infratil’s announcement.

Infratil’s infrastructure portfolio is currently managed externally by Morrison & Co, which launched the fund in 1994. Bogoievski is chief executive of both Infratil and Morrison & Co.

Its portfolio includes its stakes in Tilt Renewables and Trustpower, as well as in US wind and solar platform Longroad Energy, European renewables platform Galileo Green Energy, a 66 percent interest in Wellington Airport, a 49.9 percent stake in Vodafone NZ, and 48 percent stake in CDC Data Centres.

It has also invested in the Australian Social Infrastructure Partners platform managed by Morrison & Co, which has made equity investments in the New Royal Adelaide Hospital PPP and the South East Queensland Schools PPP, and owns a 50 percent stake in RetireAustralia, the largest privately-held retirement village operator in the country.