The takeover frenzy in energy stocks and the global private equity bonanza came together in one deal this morning when Alinta revealed that Macquarie Bank was backing a debt-laden $10 billion-plus management buyout of the Perth-based energy infrastructure giant.

The statement was short on detail about the financials of the potential offer but Alinta shares immediately rocketed $1.34 to a record $12.55, valuing the equity at $6.2 billion.

However, Alinta will also carry about $4 billion in debt once it completes the mop-up of Alinta Infrastructure Holdings, which is currently 83.3% owned.

Alinta’s American CEO Bob Browning has long been an aggressive takeover merchant and the $6.5 billion asset swap and demerger with AGL only completed in October last year.

Not content with running Australia’s biggest energy infrastructure business as a public company, Browning has co-opted his entrepreneurial chairman, stockbroker John Poynton, and four other senior managers to join the MBO.

Never before has an independent chairman joined a major management buyout of a listed Australian company like this.

Former Woodside CEO John Akehurst has taken over as chairman and the process he’ll run with the three other independent directors is spelled out in this release to the ASX.

An auction for Alinta is clearly being encouraged because all other bidders are being promised access to the same information that the management insiders have.

There are some interesting parallels with the Qantas privatisation in this deal, although we don’t know what the gang of five are being promised in the way of equity in the new vehicle and Qantas chair Margaret Jackson was not part of the $11 billion equity takeover.

We’ve updated the Crikey’s world famous list of power deals since 1992 but these developments are truly remarkable given that AGL Energy unveiled its desire for a $12 billion merger with Origin Energy only last week.

This whole asset frenzy was triggered by the $30 billion break-up and privatisation of Victoria’s energy assets by the Kennett Government during the 1990s. Not surprisingly, Alinta have hired John Wylie, the man who ran the 15 different Victorian auctions, to advise it on what would be the most audacious energy asset shuffling we’ve seen so far.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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