A bidding group led by Sydney-based Archer Capital Pty Ltd has launched a takeover proposal for the Australian alternative energy company Energy Developments.

The bid, estimated to be be above Energy Developments market value of $240 million, is described by the company as highly conditional and incomplete.

If the bid goes through, it is said to be the biggest private-to-public deal in Australia in the past 18 months.

The biggest shareholder in Energy Developments, New Zealand's Infratil, which owns a 32-per cent stake, told the New Zealand Stock Exchange yesterday that it had granted a call option over 19.99 per cent of Energy Developments' shares at an unspecified price to Archer Capital.

The option agreement says Infratil will sell Archer the 30.83 million shares subject to the option for a price equivalent to whatever takeover offer, if any, occurs - and so long as it is pitched at a price acceptable to Infratil. The option has a 10-week life, unless Archer makes an offer, which will extend it to three months.

The option also expires if Energy Developments announces an asset sale programme of $100 million or more.

"This will allow Infratil, if it wishes at the time, to sell the balance of its shareholding into the bid or scheme. Infratil has also agreed, in certain circumstances, to reimburse Archer's costs and share defined upside benefits," Infratil said in its announcement.

Energy Developments generates three-quarters of its earnings through Australian landfill, coal mine gas, LNG and compressed gas operations, and has businesses in Europe and the US.

The company has total power-station capacity of about 600 megawatts from 74 power stations.

As well as landfill and coal-mine gas, Energy Developments owns the West Kimberley Power project in Western Australia's north, which includes a 200 tonnes-a-day LNG plant. It also runs a compressed natural gas power station that powers the Uluru-Kata Tjuta National Park in the Northern Territory.

Energy Developments, at the urging of its shareholders, has been looking at selling its European businesses since earlier this year. In March, it announced that it had been unsuccessful in selling its European landfill business.

Energy Developments registered operating profit after tax of $9.4 million in the six months to December 2008.

Archer, which bought accounting software provider MYOB in January, also owns Auckland-based office technology distributor Onesource Group and its financing arm Leasing Solutions Ltd after buying them  from Eric Watson and Mark Hotchin's Hanover Group for $150 million in 2005.