Consortium outbids QIC with $470m Pacific offer

Investment group QIC will need to increase its $422 million offer for Pacific Energy, after a consortium consisting of OPTrust and Infrastructure Capital Group lobbed a superior offer to the remote power provider.

The all-cash offer is an 11.3 per cent premium to the current offer by the state-owned QIC (formerly Queensland Investment Corporation), and values Pacific at $1.085 per share.

OPTrust is a Canadian pension fund, and Infrastructure Capital is a Sydney-based fund manager that has a Perth office.

QIC has four business days to match the increased price.

Kenneth Hall, who was the founder of Pacific subsidiary Kalgoorlie Power Systems, said he intended to vote in favour of QIC’s takeover scheme in respect of his 48.7 per cent shareholding if it matched the increased price.

OPTrust managing director Stan Kolenc said the consortium was attracted to the quality of the Pacific Energy business and saw value in putting forward a superior proposal.

“We have always thought Pacific Energy was a great business and only had this reinforced during numerous site tours, discussions with management, and extensive due diligence we conducted on Pacific Energy prior to the announcement of the QIC proposal,” he said.

On July 23, Business News reported that QIC was behind the takeover bid and OPTrust was also interested in acquiring Pacific.

Two days later, Pacific announced it entered into a takeover deed with investment group QIC.

Under the agreement, Pacific shareholders would be paid 96 cents per share by QIC and receive a further 1.5 cents per share as a fully-franked dividend.

This represented a 35.4 per cent premium to Pacific’s last traded price before the offer of 72 cents and a 50.1 per cent premium to the average price over the past three months.

In Western Australia, Infrastructure Capital Group has an ownership interest in Neerabup Power Station, Kwinana Power Station, Esperance Power Station, the 336-kilometre Kambalda to Esperance gas pipeline, Mumbida Wind Farm, and Port Hedland International Airport.

OPTrust has also invested in businesses with significant WA operations, such as Aviator Group, a provider of specialist helicopter services including at Port Hedland and Argonaut Marine Group, with operations at Port of Dampier.

Sternship Advisers and UBS are financial advisers to Pacific while DLA Piper is legal adviser.

Azure Capital is financial adviser and King & Wood Mallesons are providing legal advice to the consortium.

Shares in Pacific last traded hands at 97 cents each.