DUET Group agreed to buy power supplier Energy Developments Ltd. for about A$1.4 billion ($1 billion) to gain natural gas plants in Australia, the U.S. and Europe, in one of the utility’s biggest acquisitions.
DUET offered A$8 cash a share, a 3.6 percent premium to the last close, according to a statement from Brisbane, Queensland-based Energy Developments. The offer implies an enterprise value of A$1.9 billion, it said.
The deal will give DUET power plants with about 900 megawatts of capacity. The Sydney-based company plans to raise A$1.67 billion selling shares for the deal, saying it has the support of more than 85 percent of the target’s shareholders.
The Energy Developments board has also recommended the bid in the absence of a superior proposal. It was advised by Citigroup Inc. and Gilbert + Tobin lawyers. Energy Developments rose 3.1 percent to A$7.96 at 11:02 a.m. in Sydney.
Energy Developments, majority owned by private equity firm Pacific Equity Partners Pty, manages facilities powered by fuels including liquefied natural gas, landfill gas and waste coal mine gas, its website shows.
DUET’s assets include an 80 percent stake in the Dampier-Bunbury pipeline, which connects gas reserves in Western Australia with customers in the Perth area.