MQG 0.43% $122.20 macquarie group limited

News: MQG UPDATE 1-Two consortiums lodge final bids for Australia's Endeavour Energy - sources

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    • Macquarie and Hastings-led consortiums bid: sources
    • Endeavour expected to sell for more than $3 bln: analyst
    • Queensland Investment Corp-led group backed out: sources

    (Adds details of bidding groups, valuation)

    Australian state-owned power grid Endeavour Energy has attracted final bids from two consortiums comprised of local and foreign investors, according to two sources involved in the process.

    The offers for a majority stake in the utility, which is expected to fetch at least A$4 billion ($2.99 billion) are binding and follow weeks of due diligence.

    The two sources, who confirmed the involvement of consortiums led by Macquarie Group (MQG) and Hastings Funds Management respectively, declined to be named for reasons of client confidentiality.

    Endeavour is being sold by New South Wales state as part of a broader privatisation programme to fund infrastructure development, at a time when foreign investment in sensitive assets like power grids and ports is facing increased scrutiny on national security grounds.

    The government in December advised potential bidders that no single foreign investor could own more than half of the stake in Endeavour being sold, while a domestic investor must hold at least 20 percent.

    Three groups had put in non-binding bids for Endeavour in February, but one of them, led by Queensland Investment Corp (QIC), later pulled out of the process, the sources said.

    Macquarie has teamed with Canada's British Columbia Investment Management, Australia's AMP Capital and Qatar Investment Authority.

    The other group is comprised of the same consortium that paid A$10.3 billion for a controlling stake in electricity grid Transgrid in November 2015. It includes Hastings Funds Management, Spark Infrastructure Group (SKI), Canada's Caisse de depot et placement du Quebec and sovereign wealth funds from Abu Dhabi and Kuwait.

    Endeavour is expected to fetch 1.4-1.5 times its total regulated asset base of $A6.2 billion, based on other recent transactions in the sector, RBC Capital Markets analysts said on April 19. Only a 50.4 percent stake is for sale.

    A Hastings spokesman declined to comment while Macquarie and QIC representatives did not respond immediately to a request for comment.

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