Bid battle: APA rivals Brookfield in AusNet takeover

transmission towers against pretty evening sky (APA)

A bidding war is underway for Victorian power grid owner AusNet Services after gas pipeline giant APA Group put forward a $10 billion bid to keep the infrastructure company under Australian ownership, but failed to shift Canadian company Brookfield from pole position in the takeover battle.

According to The Australian, APA’s bid tops Brookfield’s offer, however, the Canadian bidder already has already secured an exclusive due diligence period. 

APA is said to be frustrated AusNet opened its books to Brookfield given it had pitched its first $2.32 a share buyout position on September 1, one day after the Canadian company’s offer, and then made AusNet aware on September 16 it would return with a higher bid.

“Instead AusNet—a major infrastructure player which owns and operates the Victorian electricity transmission network along with gas and power distribution—sided with Brookfield given it had a firm cash offer on the table,” The Australian reported.

Related article: Brookfield makes $9.6b bid for AusNet

AusNet is still weighing the merits of APA’s higher bid and left the door open for the pair to hold talks after Brookfield’s due diligence process ends.

Brookfield’s offer faces a high bar for Foreign Investment Review Board approval given a tougher national security test for sensitive energy assets, however, APA could also face ACCC scrutiny from a competition standpoint.

APA is talking up its ability to keep vital infrastructure in Australian hands, saying the Brookfield deal would mean 100 per cent of Victoria’s electricity distribution and transmission infrastructure would be foreign owned.

“Unlike many OECD countries, Australia lacks a locally-owned and controlled energy utility with capabilities across critical energy infrastructure and with the size and strength to partner with government and the community to deliver the energy transition,” APA chief executive Rob Wheals said.