APA calls for takeovers panel intervention in $10bn AusNet battle with Brookfield
APA Group has gone to the Australian Takeovers Panel to terminate Brookfield’s exclusive due diligence on AusNet Services.
Gas pipeline giant APA has demanded the Australian Takeovers Panel intervene in its increasingly acrimonious $10bn battle for AusNet Services, calling for a termination of rival bidder Brookfield’s exclusive due diligence process.
The spat over control of the Victorian power grid owner escalated on Thursday with APA furious that AusNet had handed Brookfield eight weeks of exclusive due diligence for that group’s $2.50-a-share bid despite it lodging what it regards as a superior $2.60-a-share takeover offer.
APA wants final orders terminating the exclusivity status, allowing AusNet to respond to APA’s buyout tilt.
AusNet is still weighing the merits of APA’s higher bid and has left the door open for the pair to hold talks, but only after Brookfield’s due diligence process ends.
As things stand, APA argues AusNet cannot respond to its bid, which hinders the takeover battle “taking place in an efficient, competitive and informed market”.
No decision has been made by the Takeovers Panel on whether to conduct proceedings, and a sitting panel has yet to be appointed.
“The panel makes no comment on the merits of the application,” the regulator said. APA declined to comment.
APA was frustrated that AusNet had opened its books to Brookfield given it had lobbed its first $2.32-a-share buyout tilt on September 1, one day after the Canadian’s maiden offer, and then made AusNet aware on September 16 that it would return with a higher bid.
Instead, AusNet, a major infrastructure player that owns and operates the Victorian electricity transmission network along with gas and power distribution, sided with Brookfield, given it had a firm cash offer on the table and was able to lure a bump to $2.50 a share based on giving the Canadian exclusive status.
Major AusNet investor Martin Currie Australia attacked the company’s decision and said it was open to the APA bid, which it regards as superior.
“We are massively surprised that you give exclusive due diligence to one party when there’s an auction going on. Why would you lock out APA for eight weeks?” asked Reece Birtles from Martin Currie Australia, which also owns APA shares.
“Why they needed to jump to that point is unclear and then I would have thought, especially subsequently now that APA’s offer is out, it’s quite clear that it’s superior.”
APA’s offer for AusNet is split between $1.82 a share in cash and 0.0878 APA shares for each AusNet share. That structure means the value of APA’s offer will change depending on its share price.
APA’s shares rose 2.1 per cent to $8.73 on Thursday, while AusNet shares increased 2.4 per cent to $2.58.
AusNet Services is 32.3 per cent-owned by Singapore Power, 19.9 per cent-owned by State Grid of China, and about 48 per cent publicly owned.
