Spark could fire up portfolio with Basslink, Origin assets - Business - Business

Spark could fire up portfolio with Basslink, Origin assets -


POWER distributor Spark Infrastructure Group may bid for assets that could be sold by Origin Energy and Alinta, as well as overseas units, as it seeks to expand beyond its three original businesses.
Spark, 9.9 per cent owned by Hong Kong's Cheung Kong Infrastructure Holdings, may also bid for the Basslink power cable linking Tasmania with the Australian mainland to be sold by National Grid, chief executive Bob Stobbe said yesterday.
The Sydney-based company failed to win either of two assets it bid for last year, one in Australia and one in Britain, because the prices rival buyers offered were too high, he said.
Spark, which owns 49 per cent of three power distribution companies in southern Australia, raised $1.64 billion in an initial public offer in December 2005, intending to seek acquisitions of regulated power, gas and water assets.
"They are specifically saying they are going to do something, going to add to their portfolio of assets," said Nathan Lim, an infrastructure analyst at Aegis Equities Research.
"It's more likely to be something negotiated or amicable. I don't think Spark are undisciplined and if they do make an acquisition they've made it very clear it would have to be accretive to the distribution."
Shares in Spark Infrastructure gained 2.5¢, or 1.8 per cent, to $1.39 yesterday.
The Origin assets "would fit and some of the assets in the Alinta group fit our mandate as well", Mr Stobbe said. Spark also had "a couple" of potential overseas acquisitions, in Britain, Europe or the US, "in the pipeline", he said.
The company, jointly managed by Cheung Kong Infrastructure and a unit of Deutsche Asset Management, may make acquisitions together with those partners, Mr Stobbe said.
"I'm hearing that they're finding a lot more opportunities out there in the northern hemisphere, they're finding that prices are not quite as full as they are in Australia," Mr Lim said.
"There are obviously a lot of opportunities still out there," Mr Stobbe said in a media conference call.
"If they meet our mandate, we will be looking at them and are looking at them. We will keep a disciplined approach in relation to acquisitions but we still have a view of building our portfolio of assets during 2007."
Mr Stobbe said Spark bid "aggressively" for assets last year, and still failed to win any. The prices paid for some assets in the past year would not have provided value for Spark's shareholders, he said.