APA’s non-binding indicative proposal comes to approximately $10 billion in value, with the $2.6 price per share representing a 31 per cent premium to the undisturbed closing price of AusNet shares of $1.98 on 17 September.
Much like Brookfield, APA had previously approached AusNet, with an offer of $2.32 per share, with notice given to AusNet on 16 September that a revised proposal was in the works.
Unsurprisingly, APA is not pleased with AusNet’s announcement on Monday.
“APA is disappointed that AusNet has purported to enter into a period of exclusivity with Brookfield for effectively eight weeks, notwithstanding AusNet’s knowledge of the pending revised, and potentially superior proposal, from APA,” the company said in a filing to the ASX.
According to APA, not only is its offer superior because of the higher price, but unlike Brookfield it is offering AusNet to retain an ASX listing, while providing greater synergy benefit and enabling AusNet shareholders CGT rollover relief. Arguably it is also quicker – only being subject to a four-week due diligence period.
APA managing director and CRO, Rob Wheals, also highlighted the unique strategic advantages that this partnership would offer.
According to APA, the acquisition would create a flagship Australian company with the ability to accelerate the $20 billion growth in electricity infrastructure needed to support the decarbonisation of the Australian economy.
Should AusNet agree on terms with APA, it was said that APA expects to finance the cash considerations featured under the proposal with a combination of existing cash and debt facilities on hand, alongside new bridging facilities and an equity raising.
The equity raising is anticipated to be approximately $1.5 billion.
The indicative proposal is conditional on AusNet opening its books to APA alongside completion of a targeted due diligence review and entry into a satisfactory scheme implementation deed – all with a deadline of Tuesday, 28 September.
APA is being supported by Aquasia, Goldman Sachs, JP Morgan and Macquarie for financial advice, with King & Wood Mallesons acting as legal counsel.