Alliant strengthens hold downunder

By Mark Reynolds

United States-based electricity company Alliant Energy has reinforced its intention to expand in this part of the world by investing nearly $40 million in New Zealand-managed infrastructure investment company Infratil Australia.

Alliant is also joining Infratil Australia to bid for control of an Australian power generation company being sold by Contact Energy. The two companies are bidding for Contact's 27.7 per cent stake in Victorian power company Southern Hydro that has previously been valued at $A108.8 million.

If the bid for Southern Hydro is successful, Alliant would acquire nearly 80 per cent of the stake that is for sale, adding to a 50.2 per cent holding in the company already in Infratil's hands.

The moves in Australia expand a relationship between the Infratil group and Alliant that has already seen them secure a major stake in New Zealand's fifth-largest electricity retailer - Tauranga-based TrustPower.

Alliant managing director for Australasia Chris Lindell said the latest moves were part of his company's strategy to closely align itself with well-connected local organisations.

"We believe our experience will enable us to help increase operational efficiency, to the benefit of consumers," Mr Lindell said.

Alliant will take a 10 per cent stake in Infratil Australia, paying 95Ac a share for 33.8 million shares in the company.

Its Southern Hydro acquisition is less certain.

Contact is selling the stake because of a conflict of interest it has with its 40 per cent shareholder, Edison Mission of the United States. The stake is being sold through a tender, but Infratil has last right of refusal option over it.

Contact investor relations manager David Hunt said bidders had been shortlisted and negotiations were continuing.

Infratil Australia chief executive David Clarke said his company had made a cash offer for the Contact stake and that had been turned down.

"We continue to talk, but at the same time there are a number of other parties talking directly to Contact themselves, as you'd expect."