Macquarie not thrilled by DUET acquisition opportunity
DUET Group is expected to feature heavily in any upcoming sale of Vector's New Zealand gas transmission and distribution business.
The ASX-listed energy infrastructure owner made an approach for the Kiwi assets, worth around $1 billion, in recent months, which prompted Vector to appoint Goldman Sachs to assess strategic options for the business.
But Macquarie analysts aren't getting too excited about the prospect of DUET launching a bid.
DUET Group boss David Bartholomew is running the ruler over New Zealand gas assets Michele Mossop
The say opportunities like the Vector gas assets would add little to the growth profile of the business, with regulated asset base growth of less than 1 per cent a year.
"Whilst diversifying earnings we do not believe it would lead to a material improvement," Macquarie analyst Ian Myles said in a research note to clients.
Myles, however, acknowledged the assets were trading at a low multiple for New Zealand of1.4 to 1.6 times RAB and with tax structuring opportunities they could be yield-neutral to accretive.
APA Group, which is close to Macquarie, would also be expected to have a look at the Vector assets. DUET has worked with UBS in the past.
Meanwhile, DUET has appointed Simon Perrot, a former senior banker at CIMB Bank Australia, RBS Group and ABN AMRO, as a non-executive director.
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