APA cleared to challenge Caisse’s Hastings bid

Australian natural gas firm APA is free to make a rival bid for Hastings Diversified Utilities Fund after its agreement to make a disposal earned it a green light from regulators. Canadian pension Caisse, together with United Trust of Australia, currently have the highest offer on the table.

APA, Australia’s largest natural gas infrastructure operator, has been cleared to compete for the acquisition of Hastings Diversified Utilities Fund (HDF), a fund managed by Australian fund manager Hastings Funds Management.

The Australian Competition and Consumer Association (ACCA) had expressed concerns that if APA acquired HDF it would own all of the major gas pipelines outside of Western Australia and that competition would suffer. However, APA agreed to sell its Moomba-to-Adelaide pipeline – and this was enough for ACCA to give it approval for the HDF takeover proposal.

Eyes will now be on APA to see whether it trumps an existing A$2.325 (€1.929; $2.358) per share offer from Pipeline Partners Australia, which comprises Canadian pension Caisse de depot et placement du Quebec and the Utilities Trust of Australia fund. That offer values HDF at A$1.25 billion.

APA managing director Mick McCormack said the regulator’s decision “enables APA to consider its options with respect to its takeover offer for HDF”.

HDF’s board last week recommended that investors accept Pipeline Partners’ bid. However, they added that the recommendation was “subject to there being no superior offer and the receipt of an independent expert’s report that concludes the offer to be fair and reasonable”.