APA supports $9.45bn takeover offer from CKI-led consortium

Australia’s gas pipeline operator APA Group has recommended shareholders vote for an A$12.98bn ($9.45bn) acquisition offer from a consortium led by Hong Kong’s CK Infrastructure Holdings (CKI).

The conditional implementation agreement was signed by APA with CKI, CK Asset Holdings (CKA), Power Assets Holdings (PAH) and CKM Australia Bidco (Bidder).

Under the terms of the agreement, CKA subsidiary Bidder will acquire all of the stapled securities in APA under trust schemes.

Depending on the progress of regulatory approvals, a meeting is targeted to be held in November for APA security holders to consider the schemes.

Upon implementation of the schemes, they will receive A$11.00 cash per APA stapled security.

If the schemes are implemented at any time after 31 December, the security holders will receive an additional distribution of 4¢ per APA stapled security for each full month next year.

APA Group chairman Michael Fraser said: “The offer made by the CKI Consortium is compelling. It is an all-cash offer, representing a premium of over 30% to APA’s recent trading prices and gives certainty of value to security holders.

“In the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the schemes are fair and reasonable and in the best interests of APA security holders, the board unanimously recommends that security holders vote in favour of the schemes, and all APA directors intend to vote their own security holdings in favour of the schemes.”

In June, CKI made the takeover offer for the gas pipeline company, as part of its efforts to access a limited gas market.

Following the deal, the company is expected to become a major player in Australia’s east coast gas pipeline network, Reuters reported.

CKI is seeking approval from the Australian Competition and Consumer Commission and the Foreign Investment Review Board.