Babcock & Brown Infrastructure – APT’s partner in the original $371.7 million joint bid – has backed out of the bidding, saying it is unable to keep up with the higher offers.
Last week, the Commonwealth Bank’s fund division, Colonial First State Global Asset Management, challenged the BBI-APT bid with its own $418 million offer.
GasNet’s board last week recommended its shareholders accept Colonial’s $2.88 a share offer in the absence of a higher bid.
But with BBI now out of the picture, APT will proceed on its own with a $3.10/share bid that it says is 7.6% higher than what Colonial is offering.
Buying GasNet’s transmission network would allow APT to increase gas volumes through its 1380km pipeline from Moomba in central Australia to Sydney.
"This will directly increase the competition between APT's Moomba-to-Sydney pipeline and the Eastern Gas pipeline," APT managing director Mick McCormack told a corporatefile.com.au Open Briefing today.
"In addition, the acquisition will enhance other opportunities for GasNet in Victoria by providing APT’s expertise in executing Greenfields projects."
BBI yesterday told the Australian Stock Exchange it supported APT’s independent offer.
“Whilst GasNet would have been a good strategic fit for BBI, the price that is now required to secure ownership of this asset falls outside BBI’s investment criteria and therefore it was prudent for BBI to withdraw,” the company said.
BBI said APT’s new offer reflected the value that APT “has identified in the business as uniquely available to it”.
