Australia's Alinta recommends $6 billion Babcock bid

SYDNEY (Reuters) - Alinta Ltd. AAN.AX, Australia's largest energy infrastructure group recommended a A$7.4 billion ($6 billion) bid by a consortium led by Australia's Babcock & Brown (BNB.AX) on Friday, rejecting a rival bid by Macquarie Bank Ltd. MBL.AX.

The Perth-based company said in a statement the offer from Babcock, in partnership with utility Singapore Power, values Alinta at A$15 a share. Media reports have said that Macquarie's offer of cash and shares in a new listed entity valued Alinta at more than A$15.

Alinta Chairman John Akehurst said in a statement that the two proposals received were compared against possible internal restructuring alternatives.

"The directors are satisfied the Babcock and Singapore Power offer provides an appropriate premium over the value attributed to internal restructuring alternatives," Akehurst said.

Under the proposal, Alinta shareholders will receive A$8.50 in cash per share, 7.83 Babcock & Brown Infrastructure securities and 1.30 Babcock & Brown Wind securities for every five Alinta shares.

Alinta shareholders will also receive a distribution of 1.51 Australia Pipeline Trust (APT.AX> units for every five Alinta shares.

Alinta had said in February that it plans to split the company into asset management and infrastructure businesses under its own restructuring plan.

Analysts have said that Alinta's assets are particularly valuable and strategic for its competitors because there is currently a lack of sizeable energy assets available in the market following the recent raft of consolidation.

Alinta, which completed a A$6.3 billion asset swap with AGL Energy Ltd. (AGK.AX) in October, was still in the throes of consolidating its assets when a management buyout proposal emerged in January.

Alinta, with a market capitalization of about A$7 billion, has a stable of gas fired power stations, gas transmission pipelines and a lucrative asset management division, which operates and maintains all the distribution and transmission assets.