HK’s CKI group makes A$12.98b bid for Aussie gas pipeline firm
MELBOURNE: Hong Kong’s CK Infrastructure Holdings has made a A$12.98 billion (RM39.1 billion) takeover offer for Australia’s biggest gas pipeline company, APA Group, offering a hefty 33% premium to tap into a hot gas market.
The deal would make the private Chinese firm the major player in Australia’s east coast gas pipeline network, but comes as soaring gas and power prices have caused political blowback, raising concerns it could run into competition and national security hurdles.
CK Infrastructure, leading a consortium with CK Asset Holdings and Power Assets Holdings, offered A$11 cash per stapled security, well above APA’s last close of A$8.27 and its record high of A$9.90 hit a year ago.
“It’s a decent premium. What it basically shows is there is a disconnect between how the private market wants to value these assets and how the stock market values them,” said Jason Teh, chief investment officer at Vertium Asset Management, which does not own shares in APA.
Part of the CK Hutchison Holdings ports to telecoms conglomerate, CK Infrastructure already owns a swathe of gas and power assets across Australia, and last year bought energy networks operator DUET Group for A$7.4 billion.
APA said yesterday it would evaluate the bid and agreed to open its books for the consortium to review, while leaving the door open to other potential suitors. It told shareholders to take no action.
“Based on the indicative price of A$11 cash per stapled security, the APA board considers that it is in the best interests of APA’s security holders to engage further with the consortium,” APA said in a statement.
The CKI-led consortium welcomed APA’s decision to enter talks, saying the all-cash proposal provided a “compelling opportunity” for security holders to realise value.
APA’s biggest shareholder, UniSuper, which owns a 16.1% stake, did not comment on the offer price, but chief investment officer, John Pearce, said it fully supported allowing CKI to conduct due diligence. – Reuters