APA Group, the biggest gas pipeline company of Australia announced the acceptance of a A$12.98 billion takeover deal offered by a consortium led by CK Infrastructure of Hong Kong. Once the buyout materializes, CKI will gain the position of being a noted competitor in the east coast gas pipeline network of Australia.
CK Infrastructure consortium is inclusive of Power Assets Holdings and CK Asset Holdings with CKI being the consortium leader. The company is reportedly waiting for the deal to receive regulatory approval.
Michael Fraser APA Group chairman has been reported to term the offer made by CKI as “compelling” and said that the security holders have been unanimously recommended by the board to vote in favor of the schemes.
The deal was announced in June 2018 and it is being anticipated that once its goes through APA Group shareholders would receive A$11 in cash for each share. APA announced that due diligence by all parties was complete. The offer presently represents an 11.8% premium to APA's previous close on 10th August 2018.
Finance News Network reports that the conditional implementation agreement that APA and CKI have consented to is an all cash offer that ensures securityholders certainty of value and represents a premium of approximately 30% to APA’s recent trading prices.
CK Infrastructure already owns a major gas pipeline in Western Australia stretching from Dampier-to-Bunbury and therefore to avoid competitive concerns, will be divesting all of APA's pipeline assets in that state. Incidentally, CK Infrastructure has acquired the abovementioned pipelines through its takeover of DUET Group in 2017.
APA declared that the transaction will not affect the company’s final distribution for the FY 2018. The board expects the distribution to be 24% per stapled security, slated to be paid on 12th September 2018.