Pipeline operator APA Group has been granted permission to look over the books of takeover target Hastings Diversified Utilities Fund (HDF).

The move could lead to APA formally making a higher offer.

Energy infrastructure investor Hastings is subject to two takeover offers.

They are a cash-and-scrip offer from APA Group and an all-cash offer from Pipeline Partners Australia (PPA).

Hastings Funds Management Ltd (HFML), the responsible entity for HDF, has already recommended that Hastings’ securityholders accept the PPA offer in the absence of a superior bid.

But APA has indicated it may increase its initial bid if it is able to complete satisfactory due diligence on Hastings.

APA has already provided some details of the proposed increase and changes to the conditions of its initial offer.

Hastings on Monday confirmed it would grant APA access to its accounts.

“HDF has agreed to suitable terms and conditions for the disclosure of information to APA while APA has also agreed to provide HDF with confidential information in relation to its financial position and outlook,” HDF said in a statement.

APA said on Monday that once it had completed its due diligence inquiries, a further announcement would be made in relation to the revised takeover proposal that APA made on July 25.

APA’s original bid comprised 50 cents cash and 0.326 APA securities for each HDF security, implying a value of $2.00 for each HDF security.

It has indicated the value of that offer could rise to at least $2.50 after completion of due diligence.

PPA has made an all-cash offer of $2.325 per HDF security, which HFML has said is within an independent expert’s valuation range of $2.30 to $2.69 for control of HDF.

Securities in HDF were one cent lower at $2.54 at 1500 AEST on Monday, APA was two cents lower at $4.84.