Brookfield and APA Group’s $10bn battle for AusNet Services takes a twist
AusNet Services bidder Brookfield has gone to the Takeovers Panel accusing rival APA Group of misleading and incorrect statements
The takeover battle for power grid owner AusNet Services has taken a further twist after Canadian bidder Brookfield said rival APA Group had made “misleading and incorrect” statements, undermining the principle of an informed market.
APA on September 29 refused to back down over the $10bn takeover battle for AusNet, saying its bid will remain on the table until the Australian Takeovers Panel responds to its call for a termination of Brookfield’s exclusive due diligence process.
But Brookfield has now made its own application to the Panel, accusing APA on Monday of making announcements on September 24 and 29 that “contain misleading and incorrect information, undermining the efficient, competitive and informed market principle.”
Brookfield has called for corrective disclosure to be made and “reserves the right to propose such other interim or final orders as may be appropriate in the circumstances”.
APA on September 24 had told investors Brookfield has no platform to expand AusNet beyond Victoria and its own $2.60 a share deal will allow state governments to tap a ‘national champion’ for renewables.
But Brookfield has rejected the claims made by APA, pointing to the size of its global business with $US626bn ($862bn) under management and a history of successful deals in Australia including infrastructure group Asciano and Healthscope, while its stewardship of AusNet’s assets would also accelerate decarbonisation.
It has also pointed to potential hurdles in APA’s deal gaining ACCC clearance, and sees pressure around APA’s legacy gas business accelerating due to environment, social and governance risks.
APA was frustrated AusNet opened its books to Brookfield for eight weeks due diligence 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 it would return with an increase on its initial bid.
Instead AusNet — a major infrastructure player which 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 it was able to lure a bump to $2.50 based on giving it exclusive status.
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.
APA said that its offer — which is split between $1.82 a share in cash and .0878 APA shares for each AusNet share — would remain on the table until the takeover panel makes a decision, even though the bid was set to expire on September 28.
APA has argued its offer would be more beneficial for AusNet shareholders, creating “Australia’s largest energy transmission and distribution infrastructure utility” with a combined enterprise value of $35bn and total assets of $29bn.
It said the enlarged group would have the “scale and capability” to “accelerate the $20bn growth in electricity transmission infrastructure needed to support the decarbonisation of Australia’s economy.”
AusNet is 32.3 per cent owned by Singapore Power, 19.9 per cent owned by State Grid of China, and around 48 per cent publicly owned.
AusNet rose 0.4 per cent to $2.54 on Monday while APA increased 0.9 per cent to $8.75.
