APA offers $10bn for AusNet as bidding war heats up

Gas pipeline giant APA Group has made a $2.60 a share takeover bid for power grid owner AusNet, topping a $2.50 a share offer worth $9.6bn from Canadian giant Brookfield.

APA said it was disappointed that AusNet had sided with the Brookfield bid, lodged on Monday, given it had spoken with the target about refiling a higher offer.

AusNet, a major infrastructure player which owns and operates the Victorian electricity transmission network – one of five electricity distribution networks, and one of three gas distribution networks in the state – told the ASX on Monday it had granted Brookfield Asset Management due diligence on its third bid.

APA first approached AusNet Services with a non-binding $2.32 a share bid on September 1 through a scheme of arrangement. The two companies had engaged in talks and APA said it had made AusNet aware on September 16 that it intended to make a revised bid.

Major AusNet shareholders including Singapore Power were on board with its bid, APA said.

“APA canvassed AusNet’s major shareholders prior to approaching AusNet with the Original Proposal. APA understands that Singapore Power was supportive of APA and AusNet engaging in discussions to determine whether a transaction could be agreed,” APA said in a statement to the ASX on Tuesday.

“APA has also discussed the original proposal directly with State Grid. APA is disappointed that AusNet has purported to enter into a period of exclusivity with Brookfield for effectively eight weeks, notwithstanding AusNet’s knowledge of the pending revised, and potentially superior proposal, from APA.”

APA said the tie-up between the two companies would keep a big Australian utility listed on the ASX.

“Unlike many OECD countries, Australia lacks a locally-owned and controlled energy utility with capabilities across critical energy infrastructure and with the size and strength to partner with government and the community to deliver the energy transition,” APA chief executive Rob Wheals said.

“The combination of APA and AusNet is a unique opportunity to deliver that vision and retain a proudly Australian controlled combined group listed on the ASX.”

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