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Tilt Renewables' independent directors say Infratil-led takeover bid too low

Tuesday 4th September 2018

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Tilt Renewables' independent directors are recommending shareholders reject the $208.5 million Infratil-led takeover offer for the business, saying it is "simply too low". 

Infrastructure investment company Infratil owns 51 percent of the Melbourne-based wind and solar developer. Last month it announced it was partnering with power company Mercury NZ, which in May acquired almost 20 percent of Tilt's shares, to buy out the rest at $2.30 a share. That is 8 percent more than they were trading at prior to the offer and matches what Mercury paid for its stake. The shares last traded at $2.29 on the NZX.

However, the "offer price does not adequately recognise the value of the current operational assets and the strong pipeline of future projects", Fiona Oliver, chair of the independent director committee, said in an emailed statement. 

“This is a very strong company in the renewables energy space, with excellent prospects. The $2.30 offer is simply too low. The independent directors believe the minority shareholders should be properly rewarded if Mercury and Infratil are to get total ownership and take the company private. The JV’s premium of 8 percent on recent trading does not recognise the strategic value of this company," she said.

The premium is "materially below the average level for successful takeovers of this kind in New Zealand", she said, noting that the offer comes at an opportunistic time and doesn’t factor in a major future project that may deliver significant benefits to the company. This refers to Tilt's bid for a portion of output from the fully permitted 336MW Dundonnell Wind Farm under the Victorian Renewable Energy Auction Scheme. 

Oliver added that the committee will provide shareholders with a target company statement within two weeks that will include more detail, and an independent report by Northington Partners, "but our view is already clear".

Tilt has seven operating wind farms in Australia and New Zealand and a string of development opportunities in both countries. It has just completed the 54MW Salt Creek wind farm in Victoria and is preparing to proceed with the A$600 million, 336MW Dundonnell project in the same state.

The statement, which hasn't been published on the New Zealand or Australian stock exchanges, came as Infratil and Mercury announced they obtained approval from the Australian Foreign Investment Review Board for the deal, the only substantive condition in the takeover offer. 


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