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The APA Group (ASX:APA) share price rockets on $13 billion takeover offer

Gas infrastructure and transportation company APA Group (ASX: APA) just received a $13 billion cash takeover offer.

A Hong Kong-based consortium led by CK Infrastructure Holdings (CKI) and including property developer CK Asset Holdings and utility company Power Assets Holdings offered $11 for each APA stapled security, a 33% premium on yesterday’s closing price of $8.27.

The offer also allows APA to pay a distribution not exceeding 24 cents per security for the first half of 2018.

The proposal – at this stage still indicative and non-binding – was hard to ignore, and APA opened up to due diligence on a non-exclusive basis.

Given the strategic nature of gas infrastructure and the fact that CKI already has a presence in the Australian utility market – after buying DUET in 2017 and Envestra in 2014 – the bidders have engaged in preliminary discussions with the Foreign Investment Review Board (FIRB) and the Australian Competition and Consumer Commission (ACCC).

To get a green light from ACCC, the consortium proposed a divestment package including APA’s interests in the Goldfields and Parmelia gas pipelines and in the Mondarra gas storage facility, which would be managed by a standalone management team.

Takeover fever now surrounds APA, pushing the share price up 23% to $10.14

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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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