24/10/2016 - 15:37

Patersons wins Alinta gig

24/10/2016 - 15:37

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Perth-based broking firm Patersons Securities is understood to have won a spot on the panel of retail brokers that will support the $2 billion initial public offering of Alinta Energy.

Patersons wins Alinta gig

Perth-based broking firm Patersons Securities is understood to have won a spot on the panel of retail brokers that will support the $2 billion initial public offering of Alinta Energy.

Business News understands Patersons has been informally appointed as one of four co-lead managers on the deal, which will be one of the largest IPOs of the year.

It joins Bell Potter, Morgans, and Evans & Partners as the retail-focused brokers lined up to work on the raising.

The news coincides with the release of valuations for Alinta Energy by the joint global coordinators and joint lead managers.

On an enterprise value basis, these range from as little as $3.03 billion to as high as $5.19 billion.

After deducting the company’s likely debt of $813 million, this equates to an equity value ranging from $2.19 billion up to $4.38 billion.

The valuations are based on Alinta lifting its underlying profit (earnings before interest, tax, depreciation and amortisation) from $375 million in FY16 to about $379 million in FY17, and $420 million in FY18.

The wide valuation range stems from brokers assuming very different earnings multiples for the business, which operates power stations across Australia while also being a major player in the Western Australian retail energy market.   

It is often likened to AGL Energy, which teamed up with pipeline company APA Group for an unsuccessful $3.5 billion bid earlier this year.

Alinta’s current owners, led by US-based private equity group TPG, rejected that offer, opting instead for an IPO.

The IPO is being managed by joint global coordinators UBS, Goldman Sachs and Macquarie Capital, and joint lead managers Credit Suisse and Morgan Stanley.

Goldman was understood to have been the most bullish, saying in a research report distributed to clients today that Alinta shares could trade at between 10 times and 13 times the forecast Ebitda.

Morgan Stanley was the most cautious, saying the stock was expected to trade between 8.0 times and 10.0 times forecast Ebitda.

Alinta Energy has been owned by private equity groups since a complex restructuring in 2010 that was triggered by the collapse of its debt-laden former owner Babcock & Brown.

Upon the completion on an IPO, Alinta would return to the ASX, 16 years after the WA government privatised the energy utility through a stock market float in 2000.

That was followed by six years of successful national expansion, before Babcock & Brown (in tandem with Singapore Power) won a bidding war for the business, paying $7.4 billion in 2007.

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