Industry Funds to take energy stake

Acciona, which made a A$772 million ($837 million) bid for Pacific Hydro, intends to accept Industry Funds Management's higher offer for its stake in the Australian renewable energy generator.

Acciona, Spain's fourth-largest construction company, would accept Industry Funds' offer of A$5 a share after its own A$4.90 a share offer closes on June 28, the Madrid-based company said yesterday.

Pacific Hydro shares, which had been trading above Industry Funds' bid price on expectation Acciona may raise its offer, fell as much as 2.4 per cent.

Melbourne-based Pacific Hydro, Australia's biggest publicly traded renewable power generator, has advised shareholders to accept Industry Funds' A$788 million offer, which is scheduled to close July 8. "Acciona will allow its offer to close as scheduled on 28 June," the Spanish company said in a statement lodged on its behalf with the Australian Stock Exchange. "Following the close of Acciona's offer, Acciona will accept the offer dated 9 May 2005 made by IFM Renewable Energy" for all its stake in the company, it said.

Shares in Pacific Hydro fell as much as 12c to A$4.96, the first time they have fallen below Industry Funds' offer price since Acciona and the pension funds manager both increased their offers on April 29.

Acciona has an interest of 15.7 per cent in Pacific Hydro under an agreement it made in April to buy American Electric Power Co's stake.

- BLOOMBERG