Infratil confirms support for acquisition proposal for Tilt

Infratil Limited 5 Market Lane, PO Box 320, Wellington, New Zealand Tel +64-4-473 3663 www.infratil.com
15 March 2021


Infratil confirms support for acquisition proposal for Tilt from a consortium of
Powering Australian Renewables and Mercury NZ

Infratil welcomes the announcement today by Tilt Renewables Limited (Tilt) that it has
entered into a Scheme Implementation Agreement (SIA) with Powering Australian
Renewables (PowAR) and Mercury NZ Limited (Mercury). Under the SIA, it is proposed that
PowAR will effectively acquire Tilt’s Australian business and Mercury will acquire Tilt’s New
Zealand business by way of a Scheme of Arrangement (Scheme), and Tilt shareholders will
receive NZ$7.80 per share in cash
1
(Transaction). Tilt’s announcement is attached.
As part of the Transaction, Infratil has entered into a binding Voting Deed with PowAR under
which Infratil has committed to vote all the Tilt shares that it controls, representing 65.5% of
Tilt shares on issue, in favour of the Scheme.
The Transaction follows Infratil’s announcement on 7 December 2020 that it had initiated a
strategic review of its shareholding in Tilt. Jason Boyes, incoming Infratil CEO, said “We are
very pleased with the outcome of the strategic review, which involved an extensive outreach
program to identify potential bidders around the world, followed by a highly competitive
auction process run by Tilt. We believe the price offered by PowAR and Mercury represents
compelling value for Tilt and Infratil is pleased to support the transaction.”
Subject to any pre-completion dividends, Infratil’s gross proceeds from the sale of its 65.5%
stake in Tilt will be approximately NZ$1,926.1 million. As at 30 September 2020, Infratil’s
carrying value of Tilt was NZ$704.1 million and the sale price represents a ~99% premium to
the Tilt share price prior to Infratil’s 7 December 2020 announcement.
Infratil’s investment in Tilt originated when Tilt was part of Trustpower and Infratil has been a
strong supporter of the company’s growth since Tilt was demerged from Trustpower in 2016.
The Scheme is currently expected to take approximately 4 months to be implemented.
Implementation of the Scheme remains subject to a number of conditions and termination
events, which are summarised in Tilt’s announcement. The Voting Deed is attached to
Infratil’s Substantial Product Holder Notice, a copy of which is also attached.
Impact on Estimated FY2021 International Portfolio Annual Incentive Fee
As part of its Investor Day on 16 February 2021, Infratil noted that Tilt would be included in
the FY2021 assessment of the International Portfolio Annual Incentive Fee based on an
undisturbed valuation. Infratil advises that for these purposes a Tilt share price of NZ$5.44
per share will be applied, resulting in an increase in the FY2021 International Portfolio Annual
Incentive Fee accrual to NZ$217.0 million (previously NZ$147.3 million). Infratil notes that the
actual International Portfolio Annual Incentive Fee as at 31 March 2021 will be determined
based on independent valuations of each of the other relevant investments, together with the
Tilt undisturbed valuation. If an International Portfolio Annual Incentive Fee is ultimately
determined to be payable at 31 March 2021, the fee will be payable in three equal tranches

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Subject to reduction for any permitted dividend paid by Tilt prior to implementation.

2
over the period to 31 March 2023, with the latter two tranches only being payable if the total
valuation of all of the relevant investments as at 31 March 2022 and 31 March 2023
respectively, is no less than the total valuations determined as at 31 March 2021.
International Portfolio Realised Incentive Fee
In addition, Infratil advises that an International Portfolio Realised Incentive Fee assessment
will be undertaken upon completion of the sale of Tilt, which will reflect the difference
between the 31 March 2021 undisturbed valuation, plus the 12% hurdle through to the
completion date, and the actual sale proceeds less associated sales costs. The Realised
Incentive Fee payable will in part depend on when completion occurs and final sales costs,
however based on the estimated four month timetable to implementation, the fee is estimated
as NZ$107.1 million and would be payable in April 2022.
Advisers
Infratil is being advised by Goldman Sachs as financial adviser and Buddle Findlay and Allens as legal
advisers.


Any enquiries should be directed to:
Mark Flesher, Investor Relations, Infratil Limited
mark.flesher@infratil.com

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NZX AND ASX ANNOUNCEMENT

14 March 2021

Tilt Renewables Board recommends acquisition proposal from a consortium of
Powering Australian Renewables and Mercury NZ

Tilt Renewables Limited (Tilt Renewables) has entered into a Scheme Implementation Agreement (SIA)
with Powering Australian Renewables (PowAR) and Mercury NZ Limited (Mercury) (together, the
Consortium) under which it is proposed that PowAR will effectively acquire Tilt Renewables’ Australian
business and Mercury will acquire Tilt Renewables’ New Zealand business. This transaction will be
implemented by way of Scheme of Arrangement (the Scheme) where Tilt Renewables shareholders will
receive NZ$7.80 per share in cash.
Tilt Renewables’ decision to enter into the SIA with the Consortium follows a competitive sale process
during which Tilt Renewables received multiple binding proposals to acquire the company.
Bruce Harker, Chair of Tilt Renewables, said “This compelling acquisition proposal is a result of Tilt
Renewables’ constant focus on delivering long-term value for shareholders and the Board is pleased that,
with these new owners, the transition to renewables in Australia and New Zealand will continue to
accelerate.”
PowAR has entered into a voting deed with Infratil. Under the terms of the deed, subject to customary
conditions, Infratil has agreed to vote its entire 65.5% shareholding in Tilt Renewables in favour of the
Scheme.
Mercury, currently Tilt Renewables’ second largest shareholder, behind Infratil, with a 19.92%
shareholding has agreed to vote its entire shareholding in favour of the Scheme, as a separate interest
class.
In the absence of a superior proposal, and subject to the Scheme Consideration being within or above the
Independent Adviser’s value range, the Non-Conflicted Directors
1
of Tilt Renewables intend to vote their
shares in favour of the proposed Scheme and recommend that other shareholders also vote in favour.
Tilt Renewables shareholders will have the opportunity to vote on the Scheme at a meeting likely to be
held in around four months’ time. Therefore, Tilt Renewables shareholders do not need to take any action
at this time.
The Scheme is subject to customary conditions, some regulatory approvals (including Overseas
Investment Office (NZ) and Foreign Investment Review Board (AU)), shareholder approval and ultimately
High Court approval in New Zealand.


1
Non-Conflicted Directors refer to Directors of Tilt Renewables who have not abstained from giving a recommendation due to a
conflict of interest. The only Conflicted Director was Vincent Hawksworth, who is also CEO of Mercury.

Overview of the Scheme
Under the terms of the Scheme, Tilt Renewables shareholders will be entitled to receive NZ$7.80
2
per
share in cash (Scheme Consideration), subject to all applicable conditions being satisfied or waived and
the Scheme being implemented.
The Scheme Consideration represents a:
• 99.0% premium to Tilt Renewables’ closing share price on the NZX of NZ$3.92 per share on 4
December 2020, being the last trading day prior to Infratil’s announcement of its strategic review
• 98.6% premium to Tilt Renewables’ 1-month volume weighted average price (VWAP) on the NZX
to 4 December 2020 of NZ$3.93 per share
• 102.7% premium to Tilt Renewables’ 3-month VWAP on the NZX to 4 December 2020 of NZ$3.85
per share
If the Scheme is implemented, a shareholder who invested in Tilt Renewables upon demerger in 2016,
who participated in the entitlement offer in 2019 and capital return in 2020 will realise a return on
investment, including dividends paid, of approximately 40% per annum.
CEO of Tilt Renewables, Deion Campbell, said: “This proposal reflects the great capability of our team and
the progress we have made in our relatively short history, since we were established and dual listed on the
NZX and ASX in October 2016. With the support of our shareholders, we have developed and delivered a
portfolio of flagship renewable assets, grown our industry-leading development pipeline and made a
lasting positive impact on the communities in which we operate. I am excited by the next chapter in our
history with PowAR and Mercury, which will be an acceleration of our shared vision: to drive the transition
to renewables through everything we do.”
Under the SIA, Tilt Renewables will be bound by customary exclusivity provisions, including “no shop”,
“no talk” (subject to the fiduciary obligations of the Tilt Renewables Directors) and “notification”
obligations as well as “matching” rights. A break fee of 1% will be payable by Tilt Renewables in certain
circumstances, and a reverse break fee of 1% will be payable by the Consortium in certain circumstances.
A full copy of the SIA is attached to this announcement.
Background to the Scheme
On 7 December 2020 Infratil announced a strategic review of its 65.5% shareholding in Tilt Renewables,
including assessing the potential divestment of its shareholding. As a result of this strategic review, Tilt
Renewables announced on 4 February 2021 that it had received a number of non-binding indicative
proposals to acquire 100% of the shares in the Company.
The Board of Tilt Renewables reviewed these non-binding indicative proposals and decided to grant a
number of parties access to due diligence materials and executive management to enable these parties
to prepare binding proposals.
After reviewing the binding proposals the Board of Tilt Renewables determined that the Scheme is in the
best interests of the company.


2
Subject to a reduction due to any payment of Permitted Dividend.

Indicative timetable and next steps
Tilt Renewables is preparing a Scheme Booklet which will contain information relating to the Scheme,
including the reasons for the Non-Conflicted Directors’ unanimous recommendation and details of the
Scheme Meeting. The Scheme Booklet will also include an Independent Adviser’s Report, prepared in
accordance with guidance of the Takeovers Panel.
The process to implement the Scheme will include a Scheme Meeting where Tilt Renewables shareholders
will be given the opportunity to vote on the Scheme. It is expected to take approximately five months for
the Scheme to be implemented.
Advisers
Tilt Renewables is being advised by Lazard as financial adviser and Russell McVeagh and Ashurst as legal
advisers.

Key Highlights
• Mercury NZ Limited (Mercury) to acquire Tilt Renewables’ New Zealand assets and, following that,
Powering Australian Renewables (PowAR) to acquire 100% of the outstanding shares in Tilt
Renewables under a Scheme of Arrangement for NZ$7.80 per share in cash
• The Scheme Consideration represents approximately a 99% premium to Tilt Renewables’ share
price immediately prior to the December 2020 announcement by Tilt Renewables’ largest
shareholder of a strategic review of its shareholding
• The Scheme Consideration implies a market capitalisation (equity value) for Tilt Renewables of
approximately NZ$2,956 million, an enterprise value of NZ$3,124 million and a multiple of 28x
EV/EBITDA (FY22)
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• The acquisition proposal highlights the quality and potential of the Tilt Renewables business, as
the largest pure-play renewable energy platform across both the Australian and New Zealand
energy markets
• Tilt Renewables’ Board of Directors believes it is a compelling proposal and its Non-Conflicted
Directors will vote the shares they each control in favour of the Scheme and recommend that
other shareholders also vote in favour, in the absence of a superior proposal
• Tilt Renewables’ largest shareholder, Infratil Limited (Infratil), has entered a Voting Deed in
respect of its 65.5% shareholding under which it has agreed to vote in favour of the Scheme
• Tilt Renewables’ second largest shareholder, Mercury, has agreed to vote its 19.92% shareholding
in favour of the Scheme
ENDS

For further information please contact:
Steve Symons
Chief Financial Officer, Tilt Renewables
+61 419 893 746


3
Based on 379.0 million fully diluted shares on issue, comprising of 376.8 million ordinary shares outstanding and 2.2 million
rights, net debt of A$156m as at 30 September 2020, and broker consensus FY22 EBITDA of A$105m as at 12 March 2021.
Figures converted using an A$ to NZ$ exchange rate of 0.93.

About PowAR
PowAR was established in 2016 as a partnership between AGL and QIC on behalf of its managed clients
QGIF and the Future Fund. The partners are long-term investors and have significant combined
institutional capital with incumbent retail energy expertise as follows:
• QIC: independent investment manager owned by the Queensland Government with over A$85
billion in assets under management (as at 31 December 2020);
• Future Fund: Australia’s sovereign wealth fund with over A$160 billion under management; and
• AGL: leading ASX-listed integrated energy business with over 4 million customers and a 11GW+
generation portfolio.
PowAR's current assets include the 199 MW Silverton Wind Farm, 102 MW Nyngan Solar Plant and
53 MW Broken Hill Solar Plant in New South Wales as well as the 453 MW Coopers Gap Wind Farm in
Queensland.
About Mercury
Mercury, together with its subsidiaries, is an electricity generator and energy retailer in New Zealand. As
a retailer of electricity and gas, Mercury currently services the energy needs of residential, commercial
and industrial customers. Mercury is listed on the NZX Main Board and has a foreign exempt listing on the
ASX. As at close of the Business Day on 11 March 2021, it had a market capitalisation on the NZX of
approximately NZ$8.0 billion.