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Transfield backs buyout offer from Thai power utility

Thailand’s Ratchaburi Electric Generating Holding has offered to buy 56.2% of Transfield Services Infrastructure Fund for A$0.85 per share, a deal which puts the Sydney-listed fund's enterprise value at A$813m.

Transfield Services Infrastructure Fund has agreed to sell a majority stake in itself to Ratchaburi Electric Generating Holding, Thailand’s largest private power producer, in a deal that values the Sydney-listed infrastructure fund at A$813 million (€601 million; $891 million).

Transfield said in a statement that its independent directors unanimously have agreed that a previously-disclosed offer by Ratchaburi to buy 56.2 percent of the firm for A$0.85 per share in cash represents the “best overall outcome” for shareholders “in the absence of a superior proposal”.

The two firms now have entered into an agreement to implement the transaction, which values Transfield’s equity at A$373 million and, including net debt of $440 million, values the firm at A$813 million, Transfield said.

The announcement sent Transfield’s shares up 6.4 percent during the day’s trading, closing on A$0.835.

Shareholders of the fund, which owns power plants, water filtration plants and wind farms, still must approve the offer, as must the Supreme Court of New South Wales. Both of those approvals are expected by the end of June, the fund’s manager, infrastructure maintenance provider Transfield Services, said in a statement.

A separate deal would see Ratchaburi buy an additional 23.8 percent in Transfield on top of the 56.2 percent, taking its overall holding to 80 percent. The additional shares would be sold by Transfield Services, which would subsequently terminate its management agreement with the fund and de-list it from the stock exchange.

The sale of the additional shares is conditional on shareholder approval of Ratchaburi’s offer.