DUET GROUP SUBJECT OF $7.3 BILLION TAKEOVER OFFER
Written on the 5 December 2016 by Chelsey Landford
HONG Kong's Cheung Kong Infrastructure has launched a $7.3 billion cash bid for one of Australia's largest energy infrastructure owners, the listed DUET Group (ASX:DUE).
It comes less than four months after the federal government rejected the company's $10 billion bid for New South Wales electricity distributor Ausgrid, on the grounds of national security.
DUET confirmed receipt of the offer on Monday.
"The boards of the DUET Group are currently evaluating the proposal and at this time securityholders are advised to take no action as there is currently no certainty the proposal will proceed further," the company says in a statement to the Australian Securities Exchange.
The bid, which offers a cash payout of $3 per share, represents a 28 per cent premium to DUET's closing share price on Friday.
It has been flagged as another attempt by CKI to strengthen its stakes in the Australian infrastructure market.
Led by Hong Kong billionaire Ki Kashing, the company has been building a substantial portfolio of assets across the country since first securing a 19.3 per cent share in gas network business Envestra 17 years ago.
Its estimated $20 billion portfolio now includes SA Power Networks, Melbourne electricity supplier CitiPower, gas distributor Australian Gas Networks Limited and Victoria's largest electricity distributor Powercor.
A takeover would see it take ownership of DUET's Dampier Bunbury natural-gas pipeline, which delivers the majority of Perth's gas, and the Victorian gas distribution network Multinet Gas.
It will also inherit clean energy provider Energy Developments and a 66 per cent stake in Victorian-based electricity distributor United Energy.
The deal is subject to due diligence and approval by the Foreign Investment Review Board.
CKI is being advised by Morgan Stanley while Duet has enlisted Macquarie Capital to work as defence advisor.
Duet Group is trading up 16.60 per cent this afternoon at $2.740 per share.
In the recent Business News Australia 2016 Sydney Top Listed Companies, Duet Group was ranked at number 33, with a market capitalisation of $5.26 billion.
Author: Chelsey Landford