Alinta shareholders back Babcock deal

Alinta Ltd shareholders today voted overwhelmingly in favour of an $8 billion bid for the energy utility, led by Babock & Brown Ltd, but not without some vocal dissent from small investors attending the shareholders meeting.

A total of 97 per cent of votes cast were in favour of the bid by Babcock & Brown and Singapore Power International, which will redistribute Alinta's portfolio of assets including gas and electricity networks, a wind farm and an asset management arm.

Investors will have four options to choose from, provided the takeover is approved by the Federal Court - full cash, scrip in Babcock & Brown's infrastructure, wind and power funds, a mixture of cash and scrip, or a package of Babcock & Brown Infrastructure preference shares.

The offer values Alinta shares at $15.46 each, down from $16.06 when the deal was selected by the Alinta board over a competing Macquarie Bank proposal.

Today's shareholders meeting gave small investors an opportunity to express their disappointment at the board's handling of a proposed management buyout earlier this year, led by former chairman John Poynton in conjunction with Macquarie Bank, and the subsequent auction of the business.

"It was no predator from outside the company that started this whole ball rolling," said one shareholder.

"Predators, or pirates, came from within the company...and why did the board not immediately call a shareholders meeting?"

Chairman John Akehurst defended the board's decision, saying the directors had considered a number of options, including restructuring the company, before deciding on the current bid.

"It was not our intention or our choice to embark down this path, but having received a proposal which may have been of interest, it is the duty of directors to pursue this course of action and maximise (shareholder returns)," he said.

Some investors voiced concern over capital gains tax implications, and Babcock & Brown's recent share price slide, while others were critical of selling Western Australian infrastructure.

One shareholder said the bid was "just another sell-out of Australian infrastructure to a foreign company", while another observed that "Alinta...would have been a terrific company for Australia, not to be sold overseas."

The current bid for Alinta was also compared with Shell's failed takeover of Woodside Petroleum, with shareholders questioning whether Alinta should be retained as an asset for the state.

The board was also criticised for awarding $820,000 to the company's directors, for what Mr Akehurst said was "compensation for extraordinary effort."

Mr Akehurst said the board members had attended an additional 100 meetings as a result of the original MBO and subsequent bids for the company.