APA board backs CKI’s A$12.98b takeover bid
SYDNEY: The board of Australia’s APA Group has recommended shareholders vote for a A$12.98 billion (RM38.65 billion) takeover offer from a consortium led by Hong Kong’s CK Infrastructure Holdings Ltd (CKI) at a meeting in late November.
While analysts expect shareholders to approve the deal, APA’s stock was broadly flat after the announcement, trading around 10 per cent below the A$11 offer price on concern the regulators may block the deal due to rising gas prices.
“CKI is satisfied with its prospects of obtaining clearance and we are comfortable with the prospects of gaining approvals based on the information available to us,” said APA chairman Michael Fraser.
The deal would make CKI — part of an empire founded by Hong Kong tycoon Li Ka-shing — the biggest gas pipeline player on Australia’s east coast, giving it more pricing power in a market where gas prices are so high the issue has become political.
Gas prices have soared since the opening of three liquefied natural gas export plants on the east coast, sucking gas out of the domestic market. A consequent rise in utility bills has become a sore point for voters, leaving the government trying to win approval for an energy policy aimed at bringing prices down.
CKI, in a separate statement yesterday, said it was seeking approval from the Australian Competition and Consumer Commission as well as the Foreign Investment Review Board, which is being advised by the Critical Infrastructure Centre.
“CKI is strongly supportive of the Australian government’s energy policy objectives, particularly as they relate to the availability, reliability and affordability of energy for Australian businesses and consumers,” said CKI deputy managing director Andy Hunter.