Infratil's sales of its Australian energy businesses for $A605 million, plus adjustments, is an outstanding success, analysts say.
Infratil expects to book a profit on the sale of about $NZ350 million after transaction costs of $57 million, of which 44 million will be paid to Infratil's manager Morrison & Co.
The infrastructure investor started Infratil Energy Australia, which owns retailer Lumo Energy and utilities connections provider Direct Connect in 2004.
Lumo now has more than 540,000 customers in Victoria, South Australia, New South Wales and Queensland.
Infratil Energy Australia also owns diesel peaking generators in South Australia and New South Wales, generating more than 163 megawatts, and also owns a power station development site near Sydney.
Craigs Investment Partners said today that the net proceeds are likely to be about $NZ83 million above its valuation of these assets.
Craigs has raised its target price for Infratil shares from $2.74 to $2.98.
The shares traded as high as $2.67 this morning - more than 7 percent higher than before the sale was announced.
Forsyth Barr analyst Andrew Harvey-Green went even further, saying said Infratil is likely to receive about $A635 million from the sale after adjustments for working capital - well above his $415 million valuation. His 12-month target for the shares is now $3.20.