The 11-a-share offer for the country's largest gas pipeline operator is the first major move by victor li, who recently took the reins of the family fortune from billionaire patriarch li ka-shing, and fast tracks their investments in the lower but more stable returns offered in developed. Apa group chief executive mick McCormack has acknowledged a takeover of his gas transportation group by ck infrastructure would create "a pretty big footprint" in Australia's energy sector after revealing the board has granted the hong Kong giant due diligence. The surprise offer, first reported by Street Talk, is set to pose a fresh test for both the foreign Investment review board and the australian Competition and Consumer Commission just as energy prices are coming under the microscope in Canberra. The offer is a 33 per cent premium to apa's previous close and attractive enough for the board to grant the bidderaccess to its accounts. Advertisement "we've done that on the basis that the cki consortium has said that they've engaged with firb and the accc and obviously must be confident about what will be forthcoming Mr McCormack told. The australian Financial review.
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The housing model for the gateway villages, known as residential land-lease communities or manufactured housing estates, is based on factory-made housing for residents who pay a ground rent for their site resume in an estate. New residents are typically budget-conscious retirees selling out of their family home. It is a fast-growing sector, with listed players such as Gateway and Ingenia, along with Hometown Australia communities. Gateway generates earnings from the development sales of new homes and the ground rent from its growing portfolio. Hometown is a subsidiary of Chicago-headquartered Hometown America communities, with assets of more than US3 billion. It is backed by calzada capital, a global real estate investment firm with more than US9 billion in assets under management. Hometown now has almost 100 million days across a five-estate portfolio, including at Port Macquarie and Port Stephens in New south Wales. Gateway is advised by Fort Street Advisers and Herbert Smith Freehills. In Hometown's camp are investment bank morgan Stanley and law firm Minter Ellison). Apa chief executive mick McCormack at the company's Sydney office. Hong Kong's wealthy li family have swooped on the steady returns offered by apa group's vast pipeline network in their biggest overseas acquisition bid, with a blockbuster 13 billion all-cash offer set to tighten their grip on Australia's energy infrastructure and continue to cut their exposure to China.
Led by its founder Trent Ottawa, gateway is assessing the takeover proposal but has not agreed to provide due diligence access at this stage. "There is no guarantee that the proposal or any discussions with Hometown will lead to a formal binding offer the company said. The company has also said it is "focused on maximising value for shareholders a point that caught the attention of analysts from Macquarie "We see upside writing to the.10-per-share cash offer given the proposal is indicative only, with negotiations likely to now take place (in our view. The approach to gateway, so far on a friendly footing, may come as little surprise to many, with Hometown already tipped as Gateway's likely long-term owner. Its offer comes at a substantial premium to gateway stock, which last traded.83. It is also well ahead of Gateway's net tangible assets per security.52. It is also nicely timed, coming just a month after Gateway announced a profit downgrade, which it attributed to a slowing housing market and meant it was waiting longer for its incoming buyers to sell their existing dwellings and settle on their new homes.
The australian arm of us prefab housing giant Hometown America has established a substantial stake in Gateway lifestyle after lobbing a 635 million offer for the budget accommodation provider. Hometown is offering an indicative.10-per-share price through its local arm to buy out the listed operator in its entirety. Hometown is expected to soon lodge a substantial shareholder notice showing it has a relevant interest.5 per cent in Gateway through pre-bid acceptances. Those acceptances were gained from four year institutional investors, which Hometown is understood to have approached late last week. Those four are understood to be perennial Value, colonial First State, wavestone father's capital and Maso capital. Advertisement "This transaction underpins Hometown's Australian growth strategy having launched in this market with our initial acquisition in March 2017 said Hometown America co-president Patrick zilis. "Our experience, long-term commitment and access to capital will allow significant investment in and expansion of Gateway's operations, driving future growth and value creation.".
"For Home retail investors, the deal offers a welcome recovery in the value of their investment, following many years of difficult trading.". Clive black, an analyst at Shore capital, said sainsbury's had not overpaid for the Argos owner, adding: "We see the hrg board recommendation as good news for sainsbury's management and we remain neutral on sainsbury's stock.". The deal spells the end for Home retail Group as a listed company. In January, it sold the diy chain Homebase to australia's Wesfarmers for 340m. But Mr Burgmans and chief executive ton Buchner have not buckled, and have enjoyed the backing of the dutch government, which was concerned about job losses in the event of a takeover. Mr Buchner has long insisted the companys own plan, which involves splitting off its specialty chemicals business, will provide better returns for shareholders than a tie-up with ppg. Mr Buchner said ppg's decision to abandon its plans was "good news for akzo nobel adding that the company's senior management team has been reaching out to disaffected shareholders "in a tremendous way". He added that the company continues to focus on its plan of "pursuing its strategy of accelerating sustainable growth and profitability and creating two focused, high-performing businesses". Gateway is assessing the takeover proposal but has not agreed to provide due diligence access at this stage.
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The accc notes that the cki consortium has proposed to divest certain assets in Western Australia to address potential competition concerns.". Apa chairman Michael Fraser said the board will continue to evaluate the proposal and will "update apas security holders and the market as appropriate. This deal comes only a day after. Apa signed an agreement with agl to build the major pipeline infrastructure for agl's proposed Victorian floating gas import terminal. Image copyright pa, sainsbury's has won its four-month battle to buy argos after its owner agreed to.4bn takeover. The supermarket said the deal to buy home retail Group would create gujarati a "multi-product, multi-channel" retailer. Sainsbury's will pay a combination of shares and cash, with Home retail shareholders holding 12 of the combined business.
The deal should be completed in the third quarter of this year. Chairman david Tyler said he believed the combined business would be "very attractive to customers" and create value for shareholders of both companies. Why does sainsbury's want Argos? The supermarket had faced a rival bid for Home retail from south Africa's Steinhoff, although a formal offer never materialised. As many as 200 of Argos's 845 stores are expected to close over the coming years as leases expire, with some relocated in sainsbury's supermarkets. Shares in Home retail Group fell.5 to 165p in afternoon trading, while sainsbury's fell.1 to 273.2p. Steve clayton, head of equity research at Hargreaves Lansdown, said: "This deal catapults sainsbury's exposure to non-food items forward by around 4bn a year, and offers tantalising synergies from integrating the Argos estate and delivery capabilities with sainsbury's own.
"This is a good thing in the sense that apa's assets have been realised to their true value said Tom Millner, a director for Contact Asset Management, which runs bki. . "However, if the bid does progress then we lose another good Australian company from the register." 'significant commitment a source close to the deal said cki's readiness to sell the west Australia assets showed the company had learned from its Ausgrid and duet bids. Its a significant commitment by the company, in the billions of dollars, to divest the western Australian assets, he said. "cki listened intently to the commonwealth" by conceding some assets would stay in Australian hands. The accc has been targeting Australia's pipeline monopoly as it attempts to drive down gas prices.
We want to regulate the pipeline monopoly, mr Sims has previously told fairfax Media. We cant break up it as the situation is what it is, but there are actions we can take. The majority of Australia's gas pipelines are owned by just three companies, apa group, jemena, and Australian Gas Networks. Consumer watchdog starts review, the accc said on Wednesday it will commence a public review of the proposal which will likely last around 12 weeks. "As part of the acccs public review we will investigate the impact the proposed acquisition will have on competition for gas transportation, and the impact on upstream and downstream gas markets an accc spokeswoman said. "We will also be looking at the impact on competition for the construction of new pipelines in the future. .
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"The current offer was sufficient to open up apa for due diligence. This is just the beginning, the whole process will still take a while.". The hong Kong-based consortium said it has gender already had discussions with, and provided information to, both the firb and accc. As part of the deal, it told the accc it plans to divest the west barbing Australian assets of apa's pipeline business. The consortium has proposed a divestment package which would include apas interests in the goldfields Gas Pipeline, parmelia gas Pipeline, mondarra gas Storage facility and a standalone management team, apa said. Major gas users had little reaction to the news, saying the deal was unlikely to have much impact on their operations in the short term. Apa's largest shareholder UniSuper, which has a 15 per cent holding in the company, declined to comment. Bki investment, one of its 20 biggest shareholders, had a mixed view of the proposal.
Advertisement, yet a source close to the hong Kong group said parallels shouldnt be drawn between the ausgrid and about apa bid. Ausgrid was a very different asset and a different time. Weve since seen a change in how the federal government views these projects. The circumstances couldnt be more different today, he told fairfax Media. 'just the beginning a source close to apa, who declined to be named as the discussions were confidential, said the company has been prepared for some time should an offer arise. He said the next big issue for cki would be its dealing with the foreign Investment review board, loading and the australian Competition and Consumer Commission and following through on its plan to potentially divest apa's West Australian assets. "However, that's irrelevant to the offering for apa, they're taking the risk here, apa is just considering the offer the person said.
cent higher at 10 today. Based on the indicative price of 11 cash per stapled security, the apa board considers that it is in the best interests of apas security holders to engage further with the consortium, apa said, opening up its books to the bidders for due diligence. Cki deputy managing Director Andy hunter said the consortium "welcomed" the move. It's not cki's first foray into australia. In 2016, its takeover of Ausgrid was knocked back by the government. In 2017, the company acquired the duet Group - which comprises powerlines, gas pipelines and power stations - for.3 billion.
Gift Article share up to 10 articles a month with family, friends and colleagues. Read more, premium Digital, all the essentials plus deeper insights and analysis, all the benefits of Digital plus: Lex our agenda setting daily column. In-depth analysis on trade, emerging markets, m a, investing and more epaper a digital replica of the newspaper. Gift Article share up to 20 articles a month with family, friends and colleagues. Read more, premium Digital Print, ft newspaper delivered daily plus unlimited digital access. All the benefits of Premium plus: The ft delivered to your home or office monday to saturday, including the ft weekend paper and supplements. By, cole latimer, updated — 10:54amfirst published at 9:25am. Australian pipelines remote giant apa's share price has soared after it received a 13 billion takeover offer from a hong Kong-based consortium of power utility and infrastructure companies aiming to take control and split up the pipeline monopoly. Cki, originally known as Cheung Kong Infrastructure holdings, and Power Assets Holdings have made an all-cash offer of 11 a share for apa.
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