The nine-month battle for energy infrastructure investor Hastings Diversified Utilities Fund (HDF) has been won, with a $1.4 billion takeover bid by APA Group.
Hasting’s responsible entity, Hastings Funds Management Ltd (HFML), accepted APA’s cash and scrip offer after rival suitor Pipeline Partners Australia on Monday said it would not match the latest bid.
PPA’s all-cash offer of $2.43 a security, which previously had been recommended by HDF, was trumped by APA’s revised offer of up to $2.60 per security.
HDF on Tuesday said it had assessed APA’s latest offer and unanimously recommended its securityholders accept it in the absence of a superior one.
“We are pleased the higher offer from the APA Group is recognising the value that has been built up through the hard work of the Hastings and Epic Energy team over many years for the benefit of securityholders,” HDF chief executive Colin Atkin said in a statement.
HFML head of investor relations Simon Ondaatje said APA would not have been successful if it had not increased its offer, and he insisted the successful suitor had got a great deal.
“It is a great business, it is a cracking business,” Mr Ondaatje told AAP.
He described the takeover as a “win win” but admitted there were mixed feelings at HDF, particularly given its history from when it took struggling Epic Energy out of administration in 2004 to successfully guide the business through the global financial crisis.
The final price APA pays for HDF will depend on the level of HDF ownership it achieves.
If it achieves ownership of 90 per cent or more of HDF and is entitled to proceed to compulsory acquisition, APA’s offer will be $2.60 per HDF security.
The offer will comprise 80 cents in cash and 0.39 APA securities for each HDF security.
If APA achieves ownership of more than 70 per cent but less than 90 per cent, its offer will be $2.52, comprising 72 cents cash and 0.39 APA securities.
Meanwhile, HDF will have to pay PPA a break fee of $12.3 million.
Mr Ondaatje said APA had acquired a company with “fantastic growth assets and lots of opportunity”.
The Australian Competition and Consumer Commission recently gave the nod to APA’s push for HDF on the condition it agreed to sell HDF’s Moomba-to-Adelaide pipeline system.
Analysts have estimated the pipeline system could be sold for about $460 million.
APA made its initial offer for HDF last December, sparking the protracted bidding war.
At 1427 AEST, HDF securities were up 6.5 cents at $2.625 while APA shares were up 14 cents at $4.76.
