A consortium of Vauban Infrastructure Partners and Caisse des Dépôts (CDC), and rival bidder Quantum Pacific Group are set to file final offers for Igneo Infrastructure Partners’ French district heating company Coriance on Thursday (25 May), sources familiar with the matter said.
Vauban and CDC, which are seen as frontrunners for the deal, are advised by BNP Paribas and RBC, while Quantum Pacific Group, the investment firm of Israeli billionaire Idan Ofer, is working with advisor Bank of America, according to the sources.
A team of EQT Infrastructure and CDPQ – the only other shortlisted bidders – abandoned plans for a joint bid in the final phase of the auction, the sources said, adding that neither is expected to file an offer individually.
EQT and CDPQ were shortlisted separately in April and teamed up for a joint bid during the final phase of the process, but the team fell apart in recent days, said the sources.
EQT took part in the auction through its core infrastructure fund and was advised by DC Advisory, while Lazard advised CDPQ, according to the sources.
Igneo, which is advised on the sale by Jefferies, was tipped to fetch an enterprise value of around EUR 1.5bn for Coriance during the auction.
The company, which operates 39 district heating and cooling concessions in France and Belgium, generated EUR 82m of EBITDA in 2022.
The last phase of the auction was launched in April. The process also drew non-binding offers from New Zealand fund manager Morrison & Co and Macquarie Asset Management, which however were not shortlisted for the final phase.
The Vauban-CDC tie-up was seen as a strong contender since the beginning of the auction. State-owned banking group CDC has strong relationships with public sector authorities that tender district heating concessions in France – which make up the core of Coriance’s business. Vauban has experience in district heating, having invested in businesses in Norway, Spain and the US.
Sources said EQT, which has also invested in European district heating assets in the past, including Adven in Finland, dropped its bid for Coriance due to delays in the fundraising of its core infrastructure fund.
The core fund, which agreed to take private German power producer Tion Renewables in March in its second deal, has also been stretched by other deals recently, including drawn-out talks for the sale of French telecoms tower company TDF and the auction for Dutch energy services company Kenter.
Sources said CDPQ was not comfortable proceeding with a separate bid after EQT decided to exit the deal shortly after forming a team.
The Canadian pension fund has stakes in rolling stock companies Akiem and Ermewa in France, but has not made investments in district heating operators to date, according to Infralogic data, although it has stakes in multiple utilities and other energy assets globally.
Quantum Pacific has been seen as an outsider in the auction. The firm is best known for its investments in Singapore-headquartered shipping giant Eastern Pacific Shipping and in Spanish football club Atletico de Madrid.
It also has stakes in a sprawling web of mostly publicly listed energy assets, however, including Tel Aviv-listed renewables firm OPC Energy and its New York-listed holding company Kenon Holding, as well as LNG carrier operator CoolCo and biogas producer Verde Clean Energy, and US power producer Competitive Power Ventures.
One of the sources said Quantum Pacific would likely be subject to foreign direct investment review if it won the auction for Coriance, as district heating is part of the energy assets seen as strategic by the French government.
Igneo, EQT, CDPQ, Vauban, CDC, Quantum Pacific, DC Advisory and Bank of America declined to comment. BNP, RBC and Lazard did not respond to requests for comment.
