Brookfield Asset Management has secured an agreement to conduct exclusive due diligence for a period of eight weeks following a A$9.6 billion ($6.95 billion; €5.93 billion) bid for publicly listed Australian power grid owner AusNet.
The Canadian firm’s unsolicited, indicative, non-binding and conditional proposal of A$2.50 cash per share, put forward on Monday, withstood a A$10 billion revised rival offer from ASX-listed energy infrastructure firm APA Group, made the following day.
In a statement announcing APA’s rival offer, AusNet said: “In the course of discussions with Brookfield, it became apparent that it regarded exclusive due diligence access as a key condition of its improved proposals. Accordingly, AusNet formed the view that it was in the best interests of AusNet’s shareholders to provide Brookfield with the opportunity to conduct due diligence on an exclusive basis to enable it to put forward a binding offer.
“AusNet will consider the APA revised indicative proposal and has the ability to engage with APA following completion of the exclusivity period.”
Brookfield’s offer places the value of the company – which owns and operates Victoria’s electricity transmission network and a portion of the state’s power and gas distribution networks – at roughly A$17 billion. AusNet’s major shareholders include Singapore Power (32.3 percent) and State Grid of China (19.9 percent).
Infrastructure Investor understands the firm has been interested in AusNet for some time, viewing the power grid owner as a high-quality business with well diversified, regulated and contracted critical infrastructure.
A source familiar with the matter said the firm, which recently reached an initial close of $7 billion for its Global Transition Fund, is keen to invest further capital to support increased renewable energy projects and the broader energy transition. AusNet, if acquired, would not be part of the firm’s transition fund but was likely to benefit from Brookfield’s experience in renewable power and energy transition, the source added.
Brookfield declined to comment.
The firm’s takeover offer is the latest in a series of bids for Australian critical infrastructure including a A$23.6 billion offer from a consortium led by IFM Investors to take over Sydney Airport.
In August, Sydney-based electricity infrastructure owner Spark Infrastructure accepted a A$5.2 billion takeover proposal from a consortium led by KKR and Ontario Teachers’ Pension Plan.
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