:Australia’s APA Group made a revised bid of AUS$9.96 billion (US$7.22 billion) on Tuesday for AusNet Services Ltd, intensifying a battle with Canada’s Brookfield Asset Management to acquire the energy infrastructure firm.
The deal comes as mergers and acquisitions activity in Australia has spiked over the past year, as record-low interest rates encourage institutional investors and companies to chase higher valuations.
Shares of AusNet soared nearly 10per cent to AUS$2.59 on Tuesday, higher than Brookfield’s offer price of AUS$2.50 and slightly lower than APA’s revised price of AUS$2.60 per unit. APA shares fell 5per cent to an 18-month low.
APA’s latest offer came in a day after an affiliate of Brookfield proposed a buyout that valued AusNet at AUS$9.57 billion.
AusNet, which owns and operates electricity transmission network in Victoria, said it had rejected a previously undisclosed bid of AUS$2.32 per share from peer APA and subsequently granted exclusive due diligence to Brookfield.
AusNet said it will consider APA’s revised proposal and could potentially engage with it after the exclusivity period with Brookfield, expected to last at least eight weeks, expires.
Under APA’s cash-and-stock deal, AusNet shareholders would get AUS$2.60 per share, representing a 10.2per cent premium to its last close on Monday.
“While it (the board) is always open for any third party to put forward non-binding, indicative, conditional and incomplete proposals for AusNet, the board remains focused on securing a binding proposal that has strong prospects of obtaining the necessary shareholder support,” it said.
Earlier in the day, APA said it was disappointed with AusNet’s decision to enter an exclusivity agreement with Brookfield, notwithstanding AusNet’s knowledge of the pending revised and potentially superior proposal.
(US$1 = 1.3785 Australian dollars)
(Reporting by Sameer Manekar in Bengaluru, additional reporting by Harish Sridharan; Editing by Krishna Chandra Eluri and Sherry Jacob-Phillips)