Spark Infrastructure Group has agreed to a takeover bid from a consortium including KKR & Co. valuing the Australian energy company at approximately $5.2 billion.
According to Bloomberg, the private equity firm and its partners offered $2.95 per share in a scheme-of-arrangement deal for the Sydney-based company. The deal was unanimously recommended by Spark’s board of directors.
The consortium includes Canadian investors Ontario Teachers’ Pension Plan and the Public Sector Pension Investment Board, according to the filing. Spark’s shareholders are expected to vote on the deal by the end of the year.
The takeover follows weeks of due diligence by the investment funds, following an offer that started at $2.70 per share, and was raised to $2.80 before the firms put forward the proposal for A$2.95 per share. The consortium members are equal partners in terms of providing the equity funding.
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Spark’s assets consist of a portfolio of minority stakes in other electricity transmission and distribution businesses in Australia, including 49 per cent holdings in both South Australia’s electricity distribution network and Victoria Power Networks Pty, and a 15 per cent interest in the TransGrid high-voltage electricity transmission network. It also owns the Bomen Solar Farm Pty in New South Wales.
On completion of the transaction, the asset will be held in an unlisted entity known as PIKA Holdco. KKR and the two Canadian investors will have joint ownership of PIKA and will sit on its three-person board.
Spark Infrastructure chair Doug McTaggart said the board’s recommendations were subject to the absence of a superior proposal, and an independent expert concluding and continuing to conclude that the schemes were in the best interests of Spark Infrastructure security holders.
