Li Ka-shing bids $5.4b for Duet

China Daily (Hong Kong) - - BUSINESS - By BLOOMBERG

Hong Kong bil­lion­aire Li Ka-shing’s Che­ung Kong In­fra­struc­ture Hold­ings Ltd has of­fered A$7.3 bil­lion ($5.4 bil­lion) in cash for Aus­tralia’s Duet Group as it seeks to ex­pand its power and gas pipe­line as­sets.

CKI of­fered A$3 per share for the in­fra­struc­ture com­pany, 28 per­cent more than Fri­day’s close, Sydney-based Duet said on Monday.

The com­pany’s board said it is eval­u­at­ing the non­bind­ing and con­di­tional of­fer that pushed its shares to the high­est level in eight years.

The bid is the lat­est at­tempt by Li to bol­ster his Aus­tralian busi­ness this year. The ty­coon ex­pe­ri­enced a set­back in Au­gust when Aus­tralia’s For­eign In­vest­ment Re­view Board blocked CKI from buy­ing a ma­jor­ity stake in state-owned power net­work Aus­grid on se­cu­rity con­cerns.

“FIRB ap­provals re­main a sig­nif­i­cant bar­rier to a deal pro­ceed­ing,” Paul John­ston, an an­a­lyst at RBC Cap­i­tal Mar­kets in Mel­bourne, said in a note to clients af­ter the deal was first re­ported.

CKI may have to take on an Aus­tralian part­ner to help se­cure ap­proval, John­ston said, and noted lo­cal pen­sion fund UniSu­per al­ready has a 16 per­cent stake.

Duet’s shares jumped as much as 20 per­cent to A$2.82, the high­est since Sept 10, 2008. UniSu­per’s in­vest­ment team is wait­ing for more in­for­ma­tion on the deal, a spokes­woman said.

CKI al­ready owns stakes in Aus­tralian as­sets in­clud­ing SA Power Net­works, Pow­er­cor Aus­tralia and Aus­tralian Gas Net­works. The Duet deal would be Li’s big­gest ac­qui­si­tion in the na­tion. Wendy Tong Barnes, a spokes­woman for CKI, de­clined to com­ment.

Mac­quarie Cap­i­tal is ad­vis­ing Duet, according to the state­ment.

Duet’s as­sets in­clude the Dampier-Bun­bury pipe­line in Western Aus­tralia, a stake in elec­tric­ity dis­trib­u­tor United En­ergy, gas dis­tri­bu­tion busi­ness Multinet Gas, pipe­lines busi­ness DBP De­vel­op­ment Group and En­ergy De­vel­op­ments Ltd, according to Duet’s web­site.

Sep­a­rately, CK Hutchi­son said last week that In­dian tax au­thor­i­ties had pro­posed the con­glom­er­ate pay HK$8.9 bil­lion ($1.15 bil­lion) of cap­i­tal gains tax on a trans­ac­tion in 2007, when it sold its In­dian tele­com busi­ness to Voda­fone In­ter­na­tional Hold­ings BV.

HAO QUNYING / FOR CHINA DAILY

A ro­bot in­ter­acts with a cus­tomer at a Bank of Com­mu­ni­ca­tions branch in Han­dan, He­bei prov­ince.

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