2 May Form an Alliance in Bid to Buy Alinta BUSINESS ASIA By Bloomberg

By Denise Kee and Angela Macdonald-Smith

Singapore Power plans to join Babcock & Brown in a 9 billion Australian dollar, or $7 billion, bid for Alinta, Australia’s biggest energy transmission company, said three people familiar with the transaction.

Singapore Power and the Sydney-based Babcock may submit their bid for the Perth-based Alinta on Monday, said the people, asking not to be identified before an official announcement. Banks were invited to lend the state-run Singapore Power’s half of the bid amount for one year or less, they said. Babcock is getting loans for its portion in Australia.

Singapore Power and Babcock would get gas pipelines and power grids across Australia, Asia Pacific’s fifth-biggest economy, as a commodities-led boom increases energy demand. Alinta invited bids in January after getting a proposal for a management buyout. The Singapore-Babcock bid would be about 32 percent above today’s market value.

“The board has got to come up with something pretty decent to beat that,” said Atul Lele, a fund manager at White Funds Management in Sydney. “To have a company such as Singapore Power as a potential partner or a co-investor is a real positive.”

Singapore Power would not confirm or deny the bid or the borrowing. Babcock & Brown, Australia’s second-biggest investment bank, does not comment on market rumors, said Kelly Hibbins, a spokeswoman. Tony Robertson, an Alinta spokesman, would not comment.

Alinta, which in October completed a 6.3 billion dollar asset and debt swap with Australian Gas Light, opened a data room earlier this year to let potential bidders examine its accounts. Babcock & Brown, which owns between 3 percent and 4 percent of Alinta, and Spark Infrastructure Group are among companies that have said they may bid for the company or for its assets.

Alinta Chairman John Akehurst said Wednesday the sale process has resulted in “a number” of expressions of interest, and that “a small number” of groups were doing due diligence on Alinta’s accounts. He declined to name the potential bidders, other than a buyout group including four senior executives and Macquarie Bank. Alinta plans to split into two later this year unless it gets a “significantly superior” offer, Akehurst said.

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