Winds of Change Felt in Power Asset Transactions in ANZ
The past five years have seen frequent debate and evolution in the Australian and New Zealand (ANZ) power generation and transmission marketplaces.
Despite the mature market in ANZ, it has been tested. Traditional asset acquisition processes have changed. The process for asset trading has also evolved and is being influenced by different drivers.
Paul Williams is the General Manager of WSP’s Power business in Australia, he shares some insights below about what is driving these changes, through the lens of the key players involved, the morphing processes and how they both impact on the timelines of the transactions being undertaken.
The players - Transaction stakeholders have grown with a larger number of parties, and equity, coming from China, the Middle East and Canada – as seen recently in the privatisation of NSW Networks, the identity of bidders or speculation surrounding the sale can quickly change not just the dynamics of the transaction but also the number of parties that choose to bid. The sheer variety of equity or lending parties brings about a different set of commercial drivers and objectives in the short to medium term.
The process – Recent deals, whether it be in Networks or Generation, have seen instances where objectives have changed, some even mid-deal. Bid complexity or uncertainty surrounding acquisition has changed the driver for a particular outcome in the process. The length of the bidding process (and who survives each stage), the number of approving stakeholders where clear rules are not always known or how the deal is structured for maximum shareholder value, can all affect the deal process.
The timelines – A quick review of Recent Power asset transactions shows the volume of deals where timelines have shifted. Transactions have been delayed due to market, internal, or Government policy changes. Nothing new here perhaps, but this adds to the quickly changing landscape of bid dynamics and or framework.
Mr Williams observes that asset acquisitions have not escaped disruption. Transaction activity, market players, processes and timelines are very much a part of and intrinsically linked to market performance. As technical advisors, WSP often have the opportunity to offer a unique perspective and have learnt to be adaptive, responsive and remain diversified in a dynamic, fast-paced market.
Play the video below to hear more from Mr Williams about power asset transactions.