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Ausnet (ASX:AST) takeover battle heats up as APA Group (ASX:APA) lodges complaint

After being told by Ausnet Services Ltd (ASX: AST) it would have to wait up to eight weeks to receive an answer on its $2.60 per share takeover offer, APA Group (ASX: APA) has taken matters into its own hands.

APA Group has called in the Australian Government Takeover Panel (AGTP) to rule on what it deems as unfair circumstances.

We’re here for a good time, not a long time

To rewind, on Monday, Brookfield Asset Management proposed a $2.50 all-cash bid for AusNet. Subsequently, AusNet entered into exclusive due diligence with Brookfield to finalise a binding offer.

The next day, APA submitted a $2.60 takeover offer, which was a combination of cash and equity in APA.

AusNet’s reserved judgement on APA’s offer, as it had already entered into due diligence with Brookfield.

“AusNet will consider the APA Revised Indicative Proposal and has the ability to engage with APA following completion of the exclusivity period [with Brookfield]”.

In a move not often seen in takeover battles, APA has gone straight to the top and told AGTP to rule on whether AusNet’s response is satisfactory.

APA argues that it deserves a response to its offer, and shouldn’t be forced to wait eight weeks for it.

Conversely, AusNet says the exclusivity agreement prevents it from responding to APA’s offer.

So what happens next?

The AGTP will decide on whether to conduct proceedings and if a panel needs to be appointed.

After this stage, four likely scenarios will play out:

  1. AusNet is able to respond to the offer without breaching its exclusivity period with Brookfield
  2. AGTP asks AusNet to reduce its exclusivity period
  3. AusNet amends the exclusivity agreement so that it can respond and communicate with APA Group
  4. AGTP says the ball is in your court, and you can choose if you want to respond

My take

I recently met someone I adored. But she was a bit flaky – cancelling dates, not responding to texts, so on and so forth.

I persisted with it since I was really into her. As you can probably guess, this story doesn’t end well.

She ended things with the classic “it’s not you, it’s me”.

Usually, there are not many parallels between my dating history and corporate Australia takeover battles.

But in this case, I think AusNet is politely saying to APA Group – “thanks, but no thanks”.

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