Australian power transmission and distribution assets owner AusNet Services Ltd will enter takeover talks after Brookfield Asset Management Inc. made an approach valuing the company at approximately $9.6 billion, Bloomberg reports.
The Melbourne-based company, which serves about 1.5 million customers in south-east Victoria, has contacted its two largest holders, Singapore Power International Pte and State Grid Corp. of China, it said in a statement. Shares jumped as much as 22 per cent to $2.42 on the ASX.
“As the incumbent primary Victorian transmission network owner, AusNet is uniquely positioned for growth as the energy transition accelerates driven by decarbonisation,” AusNet said in its statement.
“Following careful consideration, and consultation with its advisers, the Board of AusNet considers that it is in the best interests of AusNet’s shareholders to engage further with Brookfield on the Indicative Proposal.
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“Accordingly, AusNet has decided to provide Brookfield with the opportunity to conduct due diligence on an exclusive basis to enable it to put forward a binding offer. To this end, AusNet and Brookfield have entered into a confidentiality deed which provides for Brookfield to conduct due diligence and for the parties to negotiate a scheme implementation deed on an exclusive basis.
“Either party may terminate the exclusivity arrangements by giving the other seven days’ written notice. No such notice may be given earlier than seven weeks from today.”
Brookfield’s indicative offer of $2.50 cash per share is a 17 per cent premium to the company’s closing price Friday, according to the target.
The prospective deal follows a spate of merger and acquisition activity for infrastructure assets in Australia, including energy company Spark Infrastructure Group.
