HK’s CKI group makes A$12.98b bid for Aussie gas pipe­line firm

The Sun (Malaysia) - - SUNBIZ -

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

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