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CKI-led consortium bids for APA
Posted on Wednesday, 13 June 2018 10:51
Victor Li is marking his tenure as chairman of CK Infrastructure (CKI), after succeeding his father last month, by leading a bid to acquire Australian gas pipeline operator APA Group for AUD 12.98 billion (USD 9.86 billion). The publicly-listed Hong Kong waste management-to-electricity lines operator has teamed up with CK Asset Holdings, CK Hutchison Holdings and equity affiliate Power Assets on a cash offer of AUD 11.00 per stapled security. APA is a leading Australian energy infrastructure business, owning and/or operating over AUD 20.00 billion of related assets, such as gas transmission pipelines spanning every state and territory on mainland Australia which deliver about half of the nation’s gas usage. The company has direct management and operational control over its portfolio and the majority of its investments, which include ownership interests in enterprises like SEA Gas Mortlake and GDI Allgas. Its stocks finished at an all-time high of AUD 10.00, after reaching an intra-day high of AUD 10.29, following the approach. With regards to the proposal, it noted: “Based on the indicative price of AUD 11.00 cash per stapled security, the APA board considers that it is in the best interests of APA’s securityholders to engage further with the consortium.” The infrastructure operator has entered into a confidentiality agreement to allow the bidder the opportunity to undertake due diligence on a non-exclusive basis – leaving the door open for a potential rival offer. CKI has already got all its ducks lined up to help persuade the Foreign Investment Review Board (FIRB) and the Australian Competition and Consumer Commission to sign off on the acquisition. It has “proposed a divestment package which would include APA’s interests in the Goldfields Gas Pipeline, Parmelia Gas Pipeline, Mondarra Gas Storage Facility and a standalone management team”. Reuters reported JPMorgan analysts are doubting another suitor will want to compete for company, especially considering its dominance on gas pipelines on Australia’s eastern coast could cause FIRB concerns. © Zephus Ltd