Hong Kong giant lobs $13b takeover bid for Australia’s biggest gas network
The giant Hong Kong-based investment and energy business CK Infrastructure has launched a $13-billion takeover of Australia’s largest gas network operator APA.
In a release to the ASX this morning, APA said it had received an unsolicited takeover proposal from CK Infrastructure of $11 a share, a 33 per cent premium to APA’s price at its previous close.
The CK Infrastructure bid group includes linked businesses SK Asset Holdings and Power Asset Holdings, which are ultimately controlled by one of Asia’s richest investors Li Ka Shing, chairman of Cheung Kong Holdings.
CK Infrastructure already owns a big slice of Australian energy assets.
Through its CHEDHA holdings and an interest in Spark Infrastructure it has a controlling stake Victoria’s largest electricity businesses Citipower and Powercor and South Australia’s ESTA business.
It also owns 19.3 per cent of Envestra, which runs 21,000 kilometres of gas pipelines serving around 1 million homes and business.
APA owns 15,000 kilometres of gas pipelines across Australia, with its network supplying 1.3 million homes and businesses, predominantly along the eastern seaboard.
APA and Envestra are by a long way the dominant two players in Australian gas distribution.
Putting them together would certainly prompt very sharp scrutiny from the Australian Competition and Consumer Commission which has long held concerns about pricing in an industry that is largely a duopoly already and only lightly regulated.
Any takeover would also require approval from the Foreign Investment Review Board.