The Australian arm of global energy firm Iberdrola has made an A$840.6m (€513.6m) cash offer for Infigen Energy.

Iberdrola Renewables Australia’s 86 Australian cents per stapled security offer, represents a 7.5% premium to a rival offer from UAC Energy.

In a statement, Iberdrola said its offer was unanimously recommended by the Infigen board in the absence of a superior proposal.

Iberdrola said it had entered a pre-bid agreement with Infigen’s largest shareholders, The Children’s Investment Master Fund and CIFF Capital UK (TCI Funds), which, together, hold a 33% stake in Infigen. The UK-based funds have agreed to sell down 20% of their stake to Iberdrola.

The Spanish company said it had agreed to a “friendly” takeover bid for Infigen to strengthen its presence in Australia, where it was already developing a 320MW hybrid wind and solar energy park.

“The acquisition of Infigen is a unique opportunity for the Iberdrola group to consolidate its presence in the attractive Australian renewable energy market through a friendly transaction,” it said.

The offer was not subject to further due diligence or refinancing and would be funded from Iberdrola group’s cash reserves, the bidder said.

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