APA chief Mick McCormack’s pipeline of success

Straight-shooting APA chief Mick McCormack, so often the corporate predator, is playing defence.

Mick McCormack managing director of APA Group. Picture: Renee Nowytarger

Exactly 18 years before CK Infrastructure yesterday lobbed a $13 billion cash bid for pipeliner APA Group, AGL’s head of pipeline regulatory affairs, Mick McCormack, was one of six people who had left the energy giant to run its Australian Pipeline Trust spin-out.

From one main asset, the Sydney-to-Moomba pipeline, and an enterprise value of $1bn, an aggressive and acquisitive growth program under Mr McCormack and his team now sees the group with assets worth $22bn and employing 1600 people.

As of yesterday though, the straight-shooting Mr McCormack, so often the corporate predator, is playing defence.

Mr McCormack has been at the helm of APT (or APA as it was renamed) since 2005 and is now the third-longest-serving Australian top 50 chief executive, after Oil Search’s Peter Botten and Sonic Healthcare’s Colin Goldschmidt.

Born and raised in country Queensland, he has appealed to investors with his strategy and his no-nonsense style of telling it how he sees it. Mr McCormack’s honest style is not just driven by his country roots.

It is also from a knowledge that many of the 1600 people he manages are like those he started out working with as an engineer building the Moonie-to-Brisbane pipeline.

They can see through corporate speak and it is no way to communicate with them.

Yesterday, the APA chief was giving little away.

“It’s not about what I make of the bid,” Mr McCormack told The Australian.

“The board considered it and $11 was sufficient to grant CKI and its friends due diligence. What that turns into, a binding bid, or no bid, or a transaction, that’s yet to be seen.”

APT was listed on the stock exchange on June 13, 2000, and Mr McCormack is proud of what he and his management team have accomplished.

And he is not one to let the broking community, whose target price range for APA was $7.50 to $10 before CKI’s $11 bid, forget they have underestimated the company in the past.

“It’s no surprise to me that parties like CKI see the value in the business at that sort of level,” Mr McCormack said.

“CKI haven’t taken much notice of some of the negative analyst coverage on us over the past six or eight years.”

Mr McCormack, 56, spends as much time as he can on his farm two hours southeast of Brisbane on the Condamine River, and lists sausage making and rock ’n’ roll drumming (he once shared the stage with the late Peter Allen) as his extra-curricular pursuits.

One of Mr McCormack’s public sparring partners of recent years, ACCC chairman Rod Sims, will play a big part in the CKI deal, where regulatory hurdles are the biggest risk. Given APA’s aggressive acquisition policy and its position as the nation’s dominant pipeliner, Mr McCormack and Mr Sims have had many a run-in.

On an investor call in 2015 he complained, “I can’t get out of bed without the ACCC sending something to me”.

But ironically, it may be Mr McCormack’s abrasive relationship with the competition regulator that gets his shareholders closer to voting on any deal that can be worked out.

CKI, which has already been in preliminary talks with the ACCC, is hoping its history as an Australian pipeline owner with no history of rocking the boat will mean it is seen by Mr Sims as a more desirable owner of most of the nation’s regulated gas pipelines.