16/01/2007 - 08:57

Alinta says Browning not privy to other offers

16/01/2007 - 08:57

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Management buy out target Alinta Ltd has moved to quell market concerns about former CEO Bob Browning's knowledge of other offers for the company, stating that he has been excluded from the process to manage other expressions in interest.

Alinta says Browning not privy to other offers

Management buy out target Alinta Ltd has moved to quell market concerns about former CEO Bob Browning's knowledge of other offers for the company, stating that he has been excluded from the process to manage other expressions in interest.

Mr Browning, who is leading the MBO, has speculated on the likelihood of a bid from Babcock & Brown Infrastructure Group Ltd, though Alinta said it had not received a bid from any group involving the investment player.

Alinta said it has also allowed Macquarie to advise the MBO but had terminated the investment bank's corporate advisory services.

Chairman John Akehurst said the Alinta board had put in place a process, supervised by its advisers Carnegie, Wylie & Company and JPMorgan, to manage expressions of interest in Alinta from potential bidders.

"Offers received at the conclusion of the process will be considered against alternative options, including a potential internal restructure," Alinta said in a statement.

"This process is designed to ensure fairness and transparency for all potential bidders, and the best outcome for Alinta shareholders."

In response, Macquarie said it was first contacted by Mr Poynton on January 2 requesting involvement in advising a MBO group.

"Macquarie had no prior knowledge or involvement prior to this date," the bank said.

"Macquarie advised John Poynton and the MBO group that it would consider acting for the MBO group only if Alinta consented to Macquarie's involvement, and continued to view the MBO approach as friendly."

The bank said Alinta wrote to Macquarie on January 10 acknowledging its intentions were friendly rather than hostile, recognising that Alinta and Macquarie have had a long advisory relationship.

"Alinta advised that the directors intend to consider the indicative proposal only once a detailed proposal is received," Macquarie said.

Alinta shares rose 14 cents to $13.90 at close of trade today.

 

Below is the full announcement:

Alinta notes an article in yesterday's Australian Financial Review (15 January) in which the former CEO of Alinta, Bob Browning, was reported as expressing an opinion regarding the likelihood of a bid for the company from Babcock & Brown.
Alinta chairman John Akehurst said that consistent with procedures that have been previously advised to the market, Mr Browning has been excluded from all consideration within Alinta of potential bids, and has, and will have, no knowledge of any approaches that the Company may receive. Moreover, Alinta has not at this time received any offers for the Company and reiterates that there is no certainty that any offer will eventuate. Specifically, Alinta has not received any offer or notice of intention to make an offer from Babcock & Brown.
Mr Akehurst said the Board had put in place a process, supervised by its advisers Carnegie, Wylie & Company (CWC) and JPMorgan, to manage expressions of interest in Alinta from potential bidders. Offers received at the conclusion of the process will be considered against alternative options, including a potential internal restructure. This process is designed to ensure fairness and transparency for all potential bidders, and the best outcome for Alinta shareholders.
The Board of Alinta will advise shareholders in due course of substantive developments in this process.
In view of market commentary, the Board also wishes to clarify its position on the involvement of Macquarie Bank (Macquarie) in this situation. Macquarie has acted as corporate advisor to Alinta on a range of matters, including several matters pending at the time of receiving the expression of interest from the MBO Group. The Company's announcement to the ASX on 9 January 2007 indicated that the MBO Group was being advised by Macquarie.
The Board of Alinta has decided to consent to Macquarie advising the MBO Group on their proposal on several conditions, including that:
(i) all information within Macquarie's possession that pertains to their advisory work for Alinta be identified and returned to the Company;
(ii) Macquarie undertakes not to make any use of this information until Alinta is in a position to provide the same information to other parties; and
(iii) Macquarie undertakes that any Macquarie employees who have had significant strategic advisory roles for Alinta will not be permitted to advise the MBO Group until Alinta is in a position to ensure that all interested parties have access to a similar level of detail regarding the Company.
Macquarie has not informed the Board whether it intends to provide the undertakings or still wishes to proceed with advising the MBO Group.
Macquarie will be compensated for prior advisory work it has performed for Alinta, but all advisory mandates involving future work for the Company are to be terminated.

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