Hong Kong’s CK Infrastructure Holdings (1038.HK) has made a A$12.98 billion ($9.8 billion) takeover offer for Australia’s biggest gas pipeline company, APA Group (APA.AX), offering a hefty 33 percent premium to tap into a tight gas market.
The deal would make CK Infrastructure, part of the business empire founded by Hong Kong tycoon Li Ka-shing, the major player in Australia’s east coast gas pipeline network. But it comes as soaring gas and power prices have caused political blowback, raising concerns it could run into competition and national security hurdles.
APA’s shares rose 21 percent to A$10.00, but closed well below the offer price of A$11 per stapled security, signaling investor uncertainty over whether Australia’s Foreign Investment Review Board (FIRB) and the Australian Competition and Consumer Commission would clear the deal.
CK Infrastructure, leading a consortium with CK Asset Holdings (1113.HK) and Power Assets Holdings (0006.HK), said it was already talking to the regulators.
Since the controversial sale of the port of Darwin to a Chinese company in 2015, the government has been at pains to demonstrate limits to its ties to China, its biggest export partner, including blocking the sale of Australia’s biggest cattle station to Chinese interests.
The FIRB rejected bids by China’s State Grid and CK Infrastructure for the nation’s biggest electricity network Ausgrid in 2016 as that business served an Australian spy facility.
However, CK Infrastructure ran into no trouble last year with a A$7.4 billion takeover of Australian pipelines and electricity network owner DUET Group, adding to the swathe of gas and power assets it already owns across Australia.
CKI’s offer for APA A$11 per stapled security was well above APA’s last close of A$8.27 and its record high of A$9.90 hit a year ago.
Source: Reuters
