APA backs CKI's $13b gas pipeline takeover
The board of Australian gas pipeline giant APA has unanimously backed Hong Kong-based utility firm CKI’s $13 billion takeover.
CKI, originally known as Cheung Kong Infrastructure Holdings, and Power Assets Holdings lobbed an all-cash offer of $11 a share for APA in June.
“The offer made by CKI is compelling,” APA chairman Michael Fraser said in a statement on Monday.
“It is an all-cash offer, representing a premium of over 30 per cent to APA’s recent trading prices and gives certainty to value to security holders. In the absence of a superior proposal, the board unanimously recommends security holders vote in favour of the schemes and all APA directors intend to vote their own security holdings in favour of the schemes.”
The two companies have now entered into an implementation agreement, which has a number of conditions including approvals from the Foreign Investment Review Board and the Australian Competition and Consumer Commission.
It also includes a "no shop" agreement. As part of the deal, there is a break fee of up to $130 million payable to APA.
The takeover is scheduled for completion in mid-December.
APA’s share price closed at $9.84 on Friday.
It's not CKI's first foray into Australia. In 2016, its takeover of Ausgrid was knocked back by the government. In 2017, the company acquired the Duet Group - which comprises powerlines, gas pipelines and power stations - for $7.3 billion.
More to come