Alinta proposed buyback running into road blocks

The proposed management buyout of Alinta is getting hit with a lot of roadblocks. Firstly the backlash over an alleged conflict of interests by adviser Macquarie Bank has undermined the deal causing shareholders to be very angry. The buyout has also stirred up and encouraged rivals to emerge. The rivals are rumoured to include Singapore Power's SP AusNet, CKI's Spark Infrastructure and Origin Energy.

Meanwhile senior Macquarie Bank (ASX:MBL) executives are believed to be deeply unhappy about the damage to the firm's reputation caused by its involvement in the proposed management buyout.

This is a good sign for Alinta shareholders as there may be a bidding war for the company. It is also good to see Macqaurie Bank is embarrassed about their handlings in the buyout. This shows management are looking at the best long term interests for the company. Alinta management on the other hand can not be trusted after the proposed buyout as it feels like amnagement was trying to pull one over the shareholders and get the company cheap.

Macquarie sacked as Alinta drops....

The Austrlaian and Austrlaian Financial Review (AFR) have both reported that Australian energy utilities group Alinta Limited (ASX:AAN) has severed its advisor contract with Macquarie Bank Kimited (ASX:MBL).

The investment bank had been hired to look at options for a restructuring of the business, but has now been revealed as the backer of a leveraged buy-out proposal for Alinta made by a group of directors and CEO Bob Browning. Alinta suggests a serious conflict of interests, and has issued a set of demands Macquarie must comply with before it is allowed to enter negotiations on the private equity transaction. All mandates involving future work will cease, although Macquarie will be compensated for corporate advisory work already undertaken. New Alinta chair John Akehurst has revealed that Macquarie Bank was already working on the buy-out deal when it was still advising its client, and that it took about a week for it to disclose the matter. Macquarie has stated that it will only participate in the management buy-out if Alinta perceives its advances as friendly.

Alinta has also rejected claims by Browning that Babcock & Brown (ASX:BNB) was interested in a takeover of Alinta.

This is a very interesting twist to the Alinta takeover story and as anyone can see there is a major conflict of interest for Macquarie Bank. The conflict of interests surrounding the buy-out plan is likely to affect the share price of the company and ALinta has already dropped 1% today. Analysts are forecasting that if the proposal does not come to fruition, Alinta stock will languish at about $12, compared with up to $17.24 if a takeover offer emerges.

Catroon presented was done by Nicholson of "The Australian" newspaper: http://www.nicholsoncartoons.com.au/

Good Luck Investing.

Alinta Takeover .. futher news and speculation

Following on from previous posts on the news on this takeover, Alinta Limited (ASX:AAN) shares rose $A0.36 to $A13.76 yesterday based on speculation that Babcock & Brown (ASX:BNB) may emerge as a suitor. The investment bank, which already owns a stake in Alinta, has declined to state whether or not it is considering making a counterbid for the Australian energy group. The value of Alinta's stock increased by 19 per cent over the four days following the announcement of a management buy-out plan.

So where too from here for investors. Well pretty much sit on the stock and wait and see what happens. There is no use speculating on what might or might not happen. The fact that a buy out has been offered means the company is going well.

Good Luck investing.