Babcock NorthWestern Purchase Seen As Share Boon

Babcock & Brown Infrastructure's planned $2.23 billion acquisition of Sioux Falls, S.D.-based NorthWestern Corp. is expected to be a positive for the firm's listed Australian investment fund. Roger Leaning, analyst at ABN AMRO Morgans in Brisbane, Australia, says the deal fits in well with the existing portfolio of assets owned by the publicly-traded fund, including Powerco, New Zealand's third largest electricity and gas network utility. The fund is listed on the Australian Stock Exchange as Prime Infrastructure. Leaning estimates Babcock's purchase could yield in excess of 7 cents Australian (5.3 cents) per share for shareholders.

Tristan Peniston-Bird, spokesman for Babcock at public relations firm Gavin Anderson & Co. in New York, says $505 million of debt will be raised upon completion of the deal, and that the fund has about $248 million cash on hand. It also adds about $41 million to its coffers semiannually through a dividend reinvestment plan, which could mean another $82-123 million, depending on when the sale closes.