March 26 (Bloomberg) -- A Macquarie Bank Ltd.-led group bid more than A$7.4 billion ($5.9 billion) in cash and stock for Alinta Ltd., Australia's biggest owner of gas pipelines and power grids, three people with knowledge of the offer said.

Macquarie's bid was more than A$15 a share, topping a joint offer of about A$14.50 a share by Babcock & Brown Ltd. and Singapore Power Ltd., said the people, who declined to be identified as talks are private. Perth, Western Australia-based Alinta and its advisers were today seeking to impose a breakup fee on bidders in case the deal doesn't proceed, said the people.

Alinta invited bids in January after being informed of a management buyout plan, and said it would measure any offers against a restructuring that involves splitting the business in two. The successful bidder will get power stations and gas and electricity networks across Australia as a commodities-led economic boom drives energy demand in the nation.

A bid of around A$15 ``is what the market is waiting for,'' said Wendy Casey, head of research at DJ Carmichael & Co. in Perth. ``Shareholders would be more likely to go for a sale than for a de-merger, which could be quite long and messy.''

Macquarie, Australia's largest securities firm, partnered with companies including ABN Amro Holding NV for its cash and stock bid. The offer is subject to conditions, including the valuation of a newly created public company and the structure of the deal's debt financing, according to the people. Alinta may announce a winning bid as early as tomorrow, they said.

Confidential Proposals

Tony Robertson, a Perth-based based Alinta spokesman, declined to comment. Officials for the bidding parties either wouldn't comment or weren't immediately available.

Alinta has a BBB credit rating from Standard & Poor's and had interest bearing liabilities of A$6.3 billion as of Dec. 31. JPMorgan Chase & Co. and Carnegie Wylie & Co. are advising Alinta on the sale and the possible restructuring.

The company said today it received confidential and conditional takeover proposals and is seeking information on the offers. It halted its shares from trading on the Australian Stock Exchange. The stock, which as jumped 26 percent since Jan. 8 --the day before the management buyout plan was announced -- closed at A$14.15 on March 23.

The trading halt, which will be for a maximum of two days, ``is required pending the release of an announcement by Alinta in relation to the status of the proposals,'' Alinta Company Secretary Yasmin Broughton said in a statement.

Babcock, Australia's second-largest investment bank, and Singapore Power would take Alinta private and split the company's assets, the people said.

`Appropriate Premium'

Alinta Chairman John Akehurst said Feb. 28 the company would be split in two later this year unless it got a ``significantly superior'' offer. A takeover bid would have to offer an ``appropriate premium'' over the shareholder value created by a breakup, he said at the time, declining to specify further.

Babcock Chief Executive Officer Phil Green on Jan. 20 said the company, which owns about 3 percent of Alinta, was considering a bid. Babcock's owns 10 percent of Babcock & Brown Power, Australia's third-largest power generator not controlled by the government.

Singapore Power owns 51 percent of SP AusNet, an Australian electricity and gas distributor, which said Nov. 23 it will seek acquisitions in Australia and New Zealand. The Singapore utility is seeking to add assets in Australia as the city-state's government plans to end its domestic monopoly.

Australia's energy demand may rise to 8,162 petajoules in the year ending June 2030 from 5,593 petajoules in the year ended June 2005, the Australian Bureau of Agricultural and Resource Economics said in a Dec. 21 report.

Data Room

Alinta on Feb. 28 said 2006 profit dropped 26 percent from a year earlier, when it recorded a gain from the sale of a stake in a power plant and gas pipeline unit. Profit before one-time items and excluding discontinued operations rose 37 percent.

The original management buyout group, which was backed by Macquarie, included then-CEO Bob Browning, former Chairman John Poynton, Chief Financial Officer Stephen Pearce, General Counsel Murray King and Business Development General Manager Chris Indermaur. Browning said March 16 he accepted a job in the U.S. and wouldn't be part of the buyout group after mid-July. The group was still working with Macquarie on a bid, he said.

Alinta, which in October completed a A$6.3 billion asset and debt swap with Australian Gas Light Co., opened a data room earlier this year to let potential bidders examine its accounts.

To contact the reporter on this story: Joyce Moullakis in Sydney at jmoullakis2@bloomberg.net;

Last Updated: March 26, 2007 06:56 EDT