Macquarie, AGL talks fuel Alinta takeover battle

The battle for control of energy company Alinta Ltd hotted up again today after Macquarie Bank Ltd and AGL Energy Ltd confirmed they were in negotiations that could lead to a new takeover offer.

Rival investment bank Babcock & Brown, in partnership with Singapore Power, was named in March as the preferred bidder for Alinta, but there has been an expectation ever since that Macquarie would return with a competing offer.

Macquarie said today that a proposal to acquire 100 per cent of Alinta "remains under consideration and the conditional agreement with AGL forms part of this draft proposal".

Macquarie did not provide details of its agreement, but AGL issued a statement saying it was negotiating with both Macquarie and Babcock to buy full ownership of the AlintaAGL retail business, should either successfully acquire Alinta.

"Whilst no agreement to acquire the retail business has yet been signed with either party, an agreement with Macquarie will be entered into if Macquarie submits a new revised bid for Alinta," AGL said.

AGL already ownes 33 per cent of the AlintaAGL business, which was created last year following the hotly contested takeover battle in which AGL and Alinta tried to buy each other.

It comprises Alinta's gas and electricity retailing business in WA and its co-generation power stations, which have been established at Alcoa's Pinjarra and Wagerup alumina refineries.

The AlintaAGL assets are already subject to a put/call option agreement if there is a change in control of Alinta.

If Babcock were successful in acquiring Alinta, it must offer to sell Alinta's 67 per cent interest in the assets to AGL at a price nominated by Babcock.

AGL must either acquire the remaining 67 per cent interest at that price or sell its 33 per cent interest at the same price.

Alinta's share price rose 10 cents today to $15.25.