The Infigen Energy Ltd (ASX: IFN) share price is climbing today after the company disclosed a takeover offer from a global energy leader. At the time of writing, Infigen shares have jumped 9.15% to 89.5 cents.

Today’s announcement follows a takeover bid from UAC Energy at the beginning of June, which sent Infigen shares flying. UAC made an offer of 80 cents per Infigen stapled security, which represented a 35.59% premium to the previous day’s closing price at the time of the announcement.

When news first broke of UAC’s offer in early June, the Infigen board advised investors to take no action. The board reiterated this recommendation in a further ASX release last week.

Why is the Infigen share price spiking?

This morning, Infigen announced it has entered into a bid implementation agreement with Iberdrola Renewables Australia. Under the agreement, Iberdrola will make an off-market takeover bid for Infigen at a cash offer price of 86 cents per stapled security. This represents a 7.5% premium to UAC’s offer of 80 cents.

In conjunction with the bid, Iberdrola has entered into a pre-bid agreement with Infigen’s largest security holder, TCI Funds, to purchase 20% of Infigen stapled securities.

Iberdrola is a major player in the global energy space. It is the number one producer of wind power and one of the world’s biggest electricity utilities in terms of market capitalisation.

Unlike the takeover play from UAC, Infigen’s board unanimously recommends that security holders accept the offer from Iberdrola. 

According to today’s release, Iberdrola’s offer is less conditional than UAC’s offer. This includes not being subject to the due diligence and disclosure conditions contained in the UAC offer.

As for the next steps, Infigen expects Iberdrola to lodge its bidder’s statement with the ASX and ASIC shortly. Following this, Infigen will dispatch its target’s statement for the Iberdrola offer to security holders “as soon as practical”.

2H20 distribution scrapped

In addition to the takeover announcement, Infigen revealed this morning it will not pay a second-half FY20 distribution. The company noted that both takeover offers are on the basis of no distribution being paid with respect to this period.

In this way, Infigen stated the decision to not pay a distribution lowers the conditionality of the bids and provides more certainty for security holders.

More reading

• ASX 200 jumps 1.8%, Australian headed for recession
• Why Afterpay, Infigen, Qantas, & Zip Co shares are charging higher
• Infigen Energy share price rockets 36% higher following takeover bid

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) has given back its morning gains and dropped into the red. The benchmark index is currently down 0.1% to 5,935.3 points.

Here’s what has been happening on the market today:

Carsales update.

The Carsales.Com Ltd (ASX: CAR) share price has been a strong performer on Wednesday. Investors have responded positively to the release of a business update by the auto listings company which included guidance for the full year. Carsales expects to report adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) in the range of $228 million to $232 million in FY 2020. This will be a 5% to 6% increase on FY 2019’s adjusted EBITDA.

Bank shares acting as a drag.

The big four banks have been acting as a major drag on the ASX 200 on Wednesday. At lunch, all four banks are trading lower despite there being no news out of the group. I suspect that investors may be taking a bit of profit off the table after strong gains on Tuesday. The worst performer in the big four has been the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price with a 1.5% decline.

CSL exec to join BHP

The CSL Limited (ASX: CSL) share price is pushing higher today despite announcing the exit of its chief financial officer. David Lamont, who has been in the role since January 2016, will leave the biotherapeutics company in October and join mining giant BHP Group Ltd (ASX: BHP). Mr Lamont will replace Peter Beaven as the Big Australian’s chief financial officer on 1 December 2020.

Best and worst ASX 200 shares.

The best performer on the ASX 200 on Wednesday has been the A2 Milk Company Ltd (ASX: A2M) share price with a gain of almost 7%. On Tuesday UBS retained its buy rating and ~$20.64 price target on the company’s shares. The worst performer has been the Mayne Pharma Group Ltd (ASX: MYX) share price with a 4.5% decline. Next week the pharmaceutical company will be kicked out of the ASX 200.

More reading

• Why a2 Milk, Carsales, Fisher & Paykel Healthcare, & Starpharma are surging higher
• Carsales share price up 5% following solid trade update
• Is $1,000 invested in AGL Energy shares a smart investment?
• How to become wealthy by investing $1,000 into ASX shares
• 3 reasons to buy ASX 200 shares right now

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended carsales.com Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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