Infratil lifts Contact Energy stake to 14% in $387m deal
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The news: Dual-listed infrastructure investor Infratil has agreed to buy a 4.92% stake in New Zealand energy company Contact Energy from TECT Holdings for NZD437.7 million ($386.5 million).
The numbers: The purchase price of NZD8.95 per share is below Contact's last close of NZD9.05.
Infratil said the NZD437.7 million acquisition will be funded through a mix of existing debt and new equity, with NZD218.8 million drawn from debt capacity and the remaining half met through issuing new Infratil shares to TECT at NZD12.43 per share, it’s last NZX closing price.
The context: The move will take Infratil's shareholding in Contact from 9.4% to 14.3%, following the recent merger of Contact and Manawa Energy.
Infratil had previously completed the sale of its 51% stake in Manawa to Contact in July, in return for around NZD186 million in cash and its current shareholding in Contact.
What they said: "TECT's decision to diversify created a natural opportunity for us to increase our investment in Contact," said Infratil CEO Jason Boyes.
"Part-funding with new shares efficiently preserves our flexibility for future growth, while increasing ownership of a strong cashflow-generating business.
"We have a deep understanding of the sector through our ownership of Manawa Energy and we're confident in the opportunities created by its merger with Contact."
The source: ASX
