QIC, Future Fund buy Australian assets of listed Tilt Renewables

The $2.1bn deal will see the partners acquire an 836MW operational wind portfolio and a 5GW development pipeline across multiple technologies.

Dual-listed Tilt Renewables has accepted a joint takeover bid worth NZ$2.9 billion ($2.1 billion; €1.7 billion) from Powering Australian Renewables and Mercury NZ.

Tilt Renewables is listed on both the ASX and the NZX, and the Morrison & Co-managed Infratil, which owns a 65.5 percent stake in Tilt, has agreed to vote in favour of the deal.

Tilt has a total operating capacity of 836MW across seven windfarms in operation and two windfarms in commissioning, with a development pipeline of more than 5,000MW capacity across various technologies.

Powering Australian Renewables is a fund established in 2016 by a partnership between Australian energy generator and retailer AGL Energy and QIC. The latter manages A$800 million ($619 million; €518 million) of funds committed to PowAR from its Global Infrastructure Fund and on behalf of Future Fund via a separately managed account.

Mercury NZ is a New Zealand energy generator and retailer that is Tilt Renewables’ second-largest shareholder with a 19.92 percent stake.

The two bidders will split Tilt Renewables’ assets between them, with PowAR taking ownership of its Australian assets and Mercury NZ taking its New Zealand assets.

The Australian portfolio comprises a handful of operating windfarms and several more early-stage wind and solar projects, including the 101MW first stage of Snowtown Wind Farm in New South Wales, the under-construction 336MW Dundonnell Wind Farm in Victoria, and the in-development 1000MW Liverpool Range Wind Farm near Sydney.

The take-private deal has been agreed at NZ$7.80 per share, valuing the business at NZ$2.9 billion.

AGL Energy said in a statement that its 20 percent interest in PowAR meant it would contribute A$341 million to fund its portion of PowAR’s acquisition.

PowAR said the deal, once complete, would make it the largest owner of wind and solar energy generation in Australia and second only in overall renewable energy capacity to the government-owned Snowy Hydro scheme. The fund will have installed capacity of 1,313MW across Australia once the deal completes.

Tilt Renewables first revealed that it had received several non-binding offers to acquire 100 percent of the business in February 2021, after majority shareholder Infratil launched a strategic review of its shareholding in Tilt in late 2020.

That strategic review followed the NZX-listed Infratil rejecting a NZ$5.4 billion takeover bid from AustralianSuper in December 2020, arguing that the bid materially undervalued the assets in its portfolio.

Infratil also owns stakes in NZ electricity generator Trustpower, as well as US wind and solar platform Longroad Energy and European renewables platform Galileo Green Energy. Outside energy, it holds a 66 percent interest in Wellington Airport, a 49.9 percent stake in Vodafone NZ and a 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.