Break-up still an option - Alinta - Business - Business - smh.com.au

Break-up still an option - Alinta -

ALINTA is playing up its willingness to break up its energy distribution business, including selling off individual parts, if it does not receive a satisfactory offer from bidders now conducting due diligence on the group.
Also yesterday, Alinta chairman John Akehurst confirmed the Australian Securities and Investments Commission had sought Alinta documents in its inquiries into conflicts of interest surrounding its recent management buyout proposal.
This had led to the resignations of former chief executive Bob Browning and former chairman John Poynton in January.
At a full-year result briefing yesterday, Mr Akehurst went to considerable pains to spell out that Alinta's demerger, first flagged on November 15, was the favoured option for the company if bidders' offers did not represent a better return.
"If the bids are at level where we feel that the internal restructuring is a better option for the company, then of course we will announce that," he said.
Mr Akehurst confirmed that Macquarie Bank was continuing to work with the management buyout team led by Mr Browning and Mr Poynton, and was among a "small number" of bidders that had been granted access to a data room to conduct due diligence.
Potential bidders that have either an expressed or reported interest in the assets include Babcock & Brown, Spark Infrastructure, Leighton Holdings and Singapore Power.
The original review of Alinta's strategic options was thrown into disarray when it was revealed on January 9 that both Mr Browning and Mr Poynton were working with Macquarie Bank, then Alinta's internal adviser, on a management buyout proposal. Within three days both men had resigned.
Macquarie Bank was sacked from its internal roles with Alinta as criticism grew over perceived conflicts of interest affecting other potential bidders.
It was later revealed that Mr Browning and Mr Poynton had been working on the proposal since at least November 30.
The events of January put Alinta into play, leaving independent directors of the board to implement protocols after January 9 that attempted to reassure other bidders that the matter was being conducted fairly.
Mr Akehurst said any demerger into an asset management and services business would take place in the second half of the year.
This indicates a decision on any formal bids is likely within the next four months.
The irony for Alinta investors is that underlying profit results for the combined company were up 37 per cent, to $140 million, in 2006, raising questions about the rationale for the demerger in the first place.
Headline profit was down 26 per cent to $173 million, with the fall largely due to a one-off profit in 2005 from the sale of assets to Alinta Infrastructure Holdings, (Alinta bought this business back last November after a lacklustre response from the market).
The company refused to reiterate or confirm Mr Browning's December guidance of a 2007 profit of up to $270 million.
Alinta declared a final dividend of 8.375c a share, payable in March.
Its shares closed down 20c, or 1.4 per cent, at $14.25 yesterday.