APA Bids $1.8b for Hastings Takeover

Submitted by Share Market Writer on 14 December, 2011 - 14:26

Gas pipeline owner APA Group (APA) has made a $1.8 billion bid for a complete takeover of the Hastings Diversified Utilities Fund (HDF). APA already owns 20.7 per cent of HDF and feels that Hasting's assets go in line with their infrastructure asset portfolio.

"The pipeline assets held by HDF form a natural fit with APA's infrastructure asset portfolio as they are able to be connected to one or more of APA's pipelines," said APA Chairman Len Bleasel. "The combined group of APA and HDF will form a unique asset footprint of infrastructure assets, and is expected to own and/or operate more than 15,000 kilometres of gas transmission pipelines across mainland Australia."

APA is offering a price of 0.326 APA shares and 50 cents per HDF share. The offer implies a share value of $2, or a 13 per cent premium, giving Hastings a $1.8 billion value.

On a separate statement, APA also announced that it had sold 80 percent of its Queensland state gas distribution network to an investment vehicle. As APA will still hold 20 per cent of the gas network, it will use the $477 million from the sales to pay debts and support the HDF offer.

The $1.8 billion offer, which requires at least 90 per cent acceptance from HDF shareholders, will stand until March 31, 2012.