Why the Spark Infrastructure (ASX:SKI) share price hit a new 52-week high

The new bid values the company at $5.2 billion.

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sparkler at celebration representing rising spark infrastructure share price

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The Spark Infrastructure Group (ASX: SKI) share price is up to a new 52-week high after accepting a third takeover bid from a consortium of investors for $2.95 per share.

At the time of writing, shares in the company are trading for $2.72 each – up 4.62%. They opened at a 12-month high of $2.78.

Let’s take a closer look at today’s news.

The Spark Infrastructure share price just hit a new high

In a statement to the ASX, Spark Infrastructure says the Ontario Teachers’ Pension Plan Board and Kohlberg Kravis Roberts & Co (the consortium) have upped their offer after twice being rebuffed by the company.

The initial bid of $2.65 per share saw the Spark Infrastructure share price rise to its previous yearly high of $2.67.

In its statement, Spark says the price of the bid will be reduced by the dividend it pays for the interim period. On 1 July the company said this would be 6.25 cents per share. This implies a proposed price of around $2.89 per security.

The new bid represents a premium of:

  • 26% on the Spark Infrastructure share price on 13 July close.
  • 31% on the 3-month volume weighted average price.

While the group says it will engage further with the consortium, and allow it to complete the necessary due diligence, it notes “there is no certainty” it will proceed.

Any potential merger will be subject to standard conditions, such as completion of satisfactory due diligence, regulatory approval, and final approval by shareholders of Spark and the consortium.

This new bid values Spark Infrastructure at approximately $5.2 billion.

Company Profile

Spark Infrastructure owns 49% interest in three electricity distribution companies. Two of these are in Victoria and one is in South Australia. It also owns 15% of TransGrid, which supplies electricity to New South Wales. These assets are heavily regulated for both standards and pricing.

Spark Infrastructure share price snapshot

Over the past 12 months, the Spark Infrastructure share price has increased about 20%. Year-to-date, the company’s value has appreciated by an even greater 27%.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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