Australia's Ausnet opens its books to Brookfield affiliate after sweetened bid

Australia’s Ausnet Services yesterday said it had opened its books to an affiliate of Canadian infrastructure investor Brookfield Asset Management after it received a higher non-binding buyout proposal of A$9.57 billion (US$6.95 billion).

The deal comes amid a spike in mergers and acquisitions activity over the past year in Australia, with record-low interest rates encouraging institutional investors and companies to chase higher valuations.

Ausnet, which owns and operates Victorian electricity transmission network, revealed that the revised A$9.57 billion bid came after it had rejected two unannounced previous bids last month from the Brookfield affiliate that valued it at up to A$9.38 billion.

The revised A$2.50 per share offer – a 26.3 per cent premium to Ausnet's last close – was up from proposals of A$2.35 and A$2.45 tabled earlier.

That sent shares of the Australian energy infrastructure firm soaring, advancing as much as 20.7 per cent to A$2.39 and marking their best intraday percentage gain.

Ausnet said it had agreed to grant Brookfield access to its books and conduct due diligence on an exclusive basis.

“Should Brookfield make a binding offer at A$2.50 per share then ... it is Ausnet board’s current intention to unanimously recommend that shareholders vote in favour of the proposal in the absence of a superior proposal,” Ausnet said in a statement.

Ausnet, owned by Singapore’s Temasek Holdings and China’s State Grid Corporation, said the deal is subject to foreign investment review board’s approval.