Hong Kong’s Chow Tai Fook buys Australia’s Alinta Energy for US$3.1bn
Alinta, owned by group of hedge funds and private equity, including TPG Capital, operates 1,800 MW of generation capacity in Australia and New Zealand
Chow Tai Fook Enterprises (CTFE), best known for its sister firm retailer Chow Tai Fook Jewellery, has agreed to buy all of Australian utilities Alinta Energy for around A$4 billion (US$3.1 billion), marking the first major foray into Australia’s energy sector, according to two sources familiar with the deal.
The firm controlled by the family of Hong Kong tycoon Cheng Yu-tung, who passed away in September has entered into a binding agreement to buy all of Alinta’s shares, subject to approval by Australia’s Foreign Investment Review Board (FIRB), the company said in a statement on Thursday.
“CTFE already has significant investments in Australian real estate and integrated resorts, but Alinta Energy would be CTFE’s first significant investment in the energy sector in Australia,” Alinta said in a separate statement.
CTFE will retain the existing Alinta Energy senior management team and grow its business by “pursuing appropriate investment opportunities in the Australian energy market as they arise”, it said.
Neither CTFE nor Alinta would comment on the transaction price, but according to the sources, it exceeds the A$4 billion valuation targeted by an initial public offering process pursued by Alinta’s owners which took place concurrently with negotiations with CTFE.
CTFE already has significant investments in Australian real estate and integrated resorts, but Alinta Energy would be CTFE’s first significant investment in the energy sector in Australia
The price values Alinta above 9.7 times forward earnings before interest, taxes, depreciate and amortisation value fetched by listed peer AGL Energy, they said.