An Australian-led consortium that includes global investors and a sovereign wealth fund has won a bid to acquire a majority interest in a New South Wales (NSW) government utility company.

Advance Energy has paid just over AUD7.6bn (€5.09bn) for a 50.4% stake in Endeavour Energy.

The consortium’s members are Macquarie Infrastructure & Real Assets, AMP Capital (on behalf of Australian superannuation fund REST Industry Super), British Columbia Investment Management Corporation, and Qatar Investment Authority.

Advance Energy took control of a 99-year lease to jointly operate with the NSW Government an electricity distribution network that services 2.4 million corporate and domestic customers.

The price paid surprised the market, which had expected the top bid to come in at around AUD4bn.

Investment banking sources said the final price equates to almost 1.6 times Endeavour’s regulated asset base – the measure used by regulators to determine the revenue, capital and operating costs and returns a utility can extract.

Using this measure, they said the price was higher than that paid for the similarly large Transgrid deal. In this case, a 99-year lease to a NSW eletricity network operator was bought for 1.55 times the regulated asset base.

Members of that consortium included La Caisse de Dépôt et Placement du Québec, Abu Dhabi Investment Authority, Kuwait’s Wren House and Australia’s Hastings Funds Management.

Endeavour Energy is also more expensive than the 1.41 times that AustralianSuper and IFM Investors paid for 50.4% of Ausgrid in NSW in an AUD16.5bn unsolicited bid last year.

Announcing its decision today, NSW state premier Gladys Berejiklian, who initiated the sale in December soon after taking over as state leader, described the deal as an “outstanding” outcome for NSW.

With the gross proceeds of AUD7.62bn, the government has now raised a total of AUD20bn from its Rebuilding NSW infrastructure programme, she said.

“We now have AUD20bn secured to go towards new schools, hospitals, roads, rail and cultural institutions across NSW – forever changing the face of the State,” said Berejiklian.

The transaction, she said, would yield net proceeds of AUD2.9bn, after repayment of debt and other transaction costs.

The government said Advance Energy had received all necessary regulatory clearances from Australian regulatory bodies.

The deal also had the blessing of the Federal Treasurer, Scott Morrison, on advice from the Foreign Investment Review Board.

The NSW government will retain a 49.6% interest in Endeavour Energy, and will have ongoing influence over operations as lessor, licensor and safety and reliability regulator.

Endeavour Energy is the third and final ‘poles-and-wires’ asset to be sold under NSW’s Asset Recycling programme.

it will continue to be regulated by the Australian Energy Regulation Commission.

Michael Cummings, head of Australia and New Zealand infrastructure funds at AMP Capital, said Endeavour Energy services many growing regions across NSW, including Western Sydney and the more rural Illawarra and South Coast regions.

The consortium, he said, was committed to ensuring Endeavour Energy maintained and enhanced its network to support this growth.