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APA fails to force AusNet to table with $10 billion takeover bid

Gas pipeline giant APA Group has failed to force its way into takeover talks with AusNet Services despite lobbing a $9.96 billion bid for the group with a promise of preventing Victoria’s power grid becoming fully foreign owned.

The ASX-listed AusNet said APA would have to wait at least eight weeks to look at its books while rival bidder Brookfield completes a period of exclusive due diligence granted on Monday, to flesh out its $2.50 cash per share ($9.6 billion) offer.

APA Group has made a $10 billion bid for AusNet.

APA Group has made a $10 billion bid for AusNet. Credit:Paul Rovere

APA said on Tuesday it was “disappointed” AusNet gave the Canadian infrastructure giant exclusive due diligence given the pair had been discussing a potentially better deal. APA revealed a cash-and-scrip offer worth $2.60 per share but said it would walk away unless it was let inside AusNet’s data room by next Tuesday.

AusNet – which owns and operates Victoria’s electricity network – did not budge and defended granting Brookfield exclusivity, saying it was a key condition of the suitor increasing its offer from $2.35 in August to $2.45 and then $2.50.

AusNet added that APA’s first approach on September 1 was $2.32 per share, and was “inferior in respect of price, form of consideration, structure and certainty” to the Brookfield offer.

“AusNet will consider the APA [proposal] and has the ability to engage with APA following completion of the exclusivity period,” the company said on Tuesday afternoon.

AusNet shares closed almost 10 per cent higher at $2.59, after climbing 19 per cent on Monday.

The bidding battle comes amid a surge in interest in infrastructure privatisation deals. Poles and wires outfit Spark Infrastructure accepted a $5.2 billion takeover from a consortium led by US private equity firm KKR last month, while Sydney Airport is negotiating a $23.5 billion sale to a group led by the super fund-backed IFM Investors.

APA said that its revised offer was not only superior value but also delivered certainty because unlike Brookfield it did not need Foreign Investment Review Board approval.

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