New Zealand's Contact Energy agrees USD-1.1bn takeover of Manawa

New Zealand-based utility Contact Energy Limited (NZE:CEN) has agreed to acquire Manawa Energy Limited (NZE:MNW), a local renewables firm with an installed generation capacity of over 500 MW and a gigawatt-scale pipeline, at a total equity valuation of NZD 1.86 billion (USD 1.14bn/EUR 1.03bn).

Tauranga-headquartered Manawa owns and operates 25 hydro sites across the country and has over 1,200 MW of geographically diversified secured wind and solar projects under active development.

“The combination with Manawa would result in a combined development pipeline of more than 10 TWh and would further enhance Contact’s strong development capabilities, accelerating Contact’s strategy to grow renewable generation while decarbonising its portfolio,” said Contact’s chairman Rob McDonald.

The announcement of the takeover agreement sent shares of the target company soaring 32.75% to NZD 5.35 at Wednesday’s close. Those in Contact, which has a market capitalisation of about NZD 6.45 billion, closed 3.20% lower at NZD 8.18.

Under the transaction terms, each Manawa share will be exchanged for 0.5719 Contact shares and NZD 1.16 in cash, valuing the company at NZD 5.95 apiece. The deal implies a total equity valuation of NZD 1.862 billion, or NZD 2.336 billion in enterprise terms.

The agreed consideration represents a premium of 47.4% to the target company’s 30-day volume-weighted average price (VWAP) and a normalised EV/EBITDAF acquisition multiple of 10.7x.

Upon completion, current Manawa shareholders will own about 18.5% of the combined entity.

The transaction has already secured conditional support from Manawa’s major shareholders -- Infratil and TECT Holdings, which collectively hold about 77.9% of Manawa shares. Subject to regulatory clearance, it is expected to close in the first half of 2025.

(NZD 1 = USD 0.616/EUR 0.558)

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