APA faced off against itself in an Alinta Pilbara auction for one

afr.com:

Here's some new information about APA Group's knockout bid for Alinta’s Pilbara power assets.

As Street Talk was reliably informed, APA was going toe-to-toe with $US16 billion ($24.7 billion) investor Morgan Stanley Infrastructure Partners in the final days of the auction. At the time, we reported MSIP was preparing to lob a binding bid before the August 14 deadline.

APA Group chief executive Adam Watson. He will pay $1.7 billion for Alinta’s Pilbara power assets. Dominic Lorrimer

However, sources close to MSIP, which is led by Mark McLean in Australia, told this column on Thursday that while it had been shortlisted, it withdrew from the auction soon after. Plenty of bankers are keen to talk up competitive tension in their sales process – especially to keep a gas pipeline giant when billions of dollars are at stake. It’s another thing trying to spook a bidder with phantom interest.

All of that means APA’s camp likely spent the last leg of the auction as uncontested buyers. That’s despite the long list of suitors that showed interest in Alinta’s West Australian power assets early on, including British oil and gas giant BP, Macquarie Asset Management, Andrew Forrest, Gina Rinehart, Wesfarmers and Pacific Equity Partners.

In the end, APA paid $1.7 billion, raising $750 million fresh equity at an 8.2 percent discount in what was its first equity capital markets trip in more than five years. That's a big price; as Chanticleer reported, the multiples it paid were higher than what its own stock trades at.

Another talking point among analysts and fund managers was whether it made sense to pay 14 times for a portfolio of older gas fired power stations, not many customers and a bit of renewables development upside, at the same