Alinta to Buy Australian Gas Light Units for $4.8 Bln


April 26 (Bloomberg) -- Alinta Ltd. agreed to buy Australian Gas Light Co.'s energy transmission and management units for A$6.45 billion ($4.8 billion) in stock and assumed debt, ending a two-month hostile takeover battle.
Shareholders of Australian Gas, the nation's largest energy utility, will own 46 percent of Perth-based Alinta after the transaction, the companies said today. Australian Gas will retain natural gas and power retailing and production and acquire 33 percent of Alinta's gas retailing unit.
The deal resolves rival bids by the companies for dominance in an energy market forecast by the government to grow 38 percent by 2020. Australian Gas will focus on electricity and gas supplies, while Alinta, Western Australia's biggest gas retailer, gets control of the nation's biggest gas pipeline and electricity networks business.
``Both companies get to pursue their respective strategies,'' said John Deniz, a utilities analyst at Aegis Equities Research Pty in Sydney. ``Alinta is looking for infrastructure assets where they can tie up the operating and maintenance rights and AGL is still pursuing upstream energy.''
Shares in Alinta surged as much as 61 cents, or 5.5 percent, to A$11.62 on the Australian Stock Exchange. They were at A$11.59 at 3:05 p.m. Sydney time. Shares in Sydney-based Australian Gas rose as much as 74 cents, or 4 percent, to A$19.20. They last traded at A$19.13.
Browning Vs Anthony
Alinta, led by Chief Executive Bob Browning, and Australia Gas, led by Paul Anthony, had rejected each other's offers to combine and then split energy retailing and generation from the regulated energy transmission and distribution businesses. On April 24, Alinta said Australian Gas's A$2.7 billion share-based takeover offer is ``an insult.''
``This removes the stalemate that was in place before,'' said Jason Teh, who helps manage the equivalent of $4.1 billion, including utility stocks, at Investors Mutual Ltd. in Sydney. ``I think it's a win-win for both sides and it looks as if the market thinks so too. Browning's key priority was always to get his hands on the infrastructure assets.''
Alinta is being advised by Macquarie Bank Ltd. and Blake Dawson Waldron. Australian Gas is being advised by UBS AG and Goldman Sachs JBWere Pty.
Transaction Details
The transaction involves Alinta paying Australian Gas shareholders A$2.5 billion in stock, giving up a A$367 million stake in its energy unit and canceling a A$1.74 billion shareholding in Australian Gas. Alinta will also assume A$1.85 billion in debt, the companies said today in a joint statement to the Australian Stock Exchange and on a conference call with reporters.
Australian Gas will acquire 33 percent of Alinta's gas retailing and power generation unit, to be renamed AlintaAGL, for A$367 million and the right to buy the remaining shares within five years.
Alinta will hold Australian Gas's infrastructure assets and asset management business, known as Agility.
The transactions require shareholder approval and may be completed in early August, Anthony said on the conference call.
The enlarged Alinta business will be 54 percent owned by Alinta's existing shareholders and 46 percent by Australian Gas shareholders.
To contact the reporter on this story:
Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net.