Tilt directors repeat recommendation that shareholders reject Infratil, Mercury takeover offer
By Sophie Boot
Sept. 12 (BusinessDesk) - Tilt Renewables's independent directors have repeated their advice that shareholders reject a takeover offer from major shareholders Infratil and Mercury NZ, after Tilt announced it has signed a 15-year supply deal with Victoria's state government for the company's proposed Dundonnell wind farm.
Tilt yesterday said it has accepted an offer from the Victorian Government for about 37 percent of the output from the fully permitted, 80-turbine wind farm.
That deal - effected through contracts for differences - gives it enough certainty to progress the 336 MW project to a final investment decision for financial close, which it expects to make in late 2018. Construction would begin early next year and be completed by mid-to-late 2020.
Mercury and Infratil are seeking to take over Tilt, pooling their stakes into a new entity and offering $208.5 million, or $2.30 a share, to minority shareholders. Tilt's independent directors last week recommended investors reject the bid as being too low and not recognising the firm's pipeline of future projects. Infratil insists it's a fair and reasonable deal.
Today, Fiona Oliver, chair of Tilt's independent directors committee, said the support agreement re-confirms their view that the offer "materially undervalues the current operational assets and the strong pipeline of future projects.
"The Dundonnell announcement is great news for Tilt Renewables and all our shareholders. It is expected that upon completion in mid to late 2020 Dundonnell will contribute approximately A$40 - $50 million of ongoing free cash flow before debt service annually," Oliver said. "This is significant. It will provide attractive, additional shareholder returns.
"The success of Dundonnell confirms the value of Tilt Renewables’ development pipeline, the execution capability of management, and Tilt Renewables’ market leading position in renewable energy in Australia and New Zealand. Beyond Dundonnell, we have a significant pipeline of exciting development projects that we expect to deliver further strong shareholder returns."
Oliver said that Tilt will publish a target company statement, with more detail on the independent directors' views and an independent valuation report by Northington Partners, on Sept. 17. The offer will be open until Oct. 15 and can be extended.
Tilt's shares last traded at $2.31, unchanged since the Victoria state government announcement.