China’s CKI Consortium is one step closer to buying Australian gas pipeline and energy infrastructure owner, APA Group (ASX: APA).
As APA Group announced in June, a consortium led by Hong-Kong based CK Infrastructure has approached APA Group for a potential $13 billion takeover.
The deal was indicative and highly conditional.
APA Deal 1 Step Closer
In a public announcement today, APA said it has entered a binding agreement with CK, pushing the $11 per share deal one step closer.
“APA’s Board of Directors believes the offer to be compelling for APA Securityholders given the premium it represents to recent trading (35.1% premium to the 3 month volume weighted average price of A$8.14), attractive acquisition multiple and certainty of value provided by the 100% cash consideration.”
However, the deal remains subject to regulatory approvals, APA said. Two important hurdles it must pass include the Australian Competition and Consumer Commisison (ACCC) and Foreign Investment Review Board (FIRB).
APA Group currently connects 1.3 million Australian homes to gas for energy and heating. It says it supplies around half of our country’s usage of gas. Clearly, the proposed deal is a sensitive one for rule makers, consumer groups, and security officials.
Previously, CK was vetoed from the $11 billion takeover of Ausgrid, an Australian electricity distribution business with 1.7 million customers. However, it did acquire DUET Group and Envestra.
Depending on regulatory requirements APA expects to send important information to its investors before the end of October.
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