Wednesday, July 18, 2007

SP AusNet to acquire Alinta?

SP AusNet, an Australian power distributor 51 percent-owned by Singapore Power, is still in talks with its parent about acquiring some Alinta assets.

SP AusNet Chairman Ng Kee Choe revealed in an address that Singapore Power intends to offer Melbourne-based SP AusNet the opportunity to acquire transmission and distribution assets of Alinta, if the purchase of Alinta assets by Singapore Power and other buyers is approved. If the board pursues the offer, SP AusNet shareholders will need to approve it, he continued.

Singapore Power, the island state's monopoly in electricity supplier and partner Babcock & Brown agreed to buy Perth-based Alinta, Australia's biggest energy transmission company, in May for about A$8 billion (US$7 billion) to carve up assets. The Singapore company is due to get distribution networks and an energy asset management unit in eastern Australia, and two gas pipelines.

“We look forward to the opportunity this may provide SP AusNet,” Managing Director Nino Ficca said in a web-cast address. “SP AusNet is dedicated to evaluating future opportunities for investment and acquisition in Australia and New Zealand.”

This proposed acquisition bares similar resemblance to the rumoured Macquarie takeover of Qantas earlier this year, which eventually fell through. As Australian’s face the prospect of additional purchases of home-grown businesses companies by that of rivals corporations, will they become increasingly exasperated? Should the negotiations turn sour, what could this mean for future investments by Singapore companies looking for similar private equity deals in outside businesses?