Caisse bid for Hastings fund gets thumbs up

A subcommittee of independent directors at Hastings Diversified Utilities Fund has recommended shareholders accept a A$1.25bn takeover offer tabled by Caisse de depot et placement du Quebec and Utilities Trust of Australia.

A bid tabled by a consortium of Canadian pension Caisse de depot et placement du Quebec (Caisse) and the Utilities Trust of Australia fund for the Hastings Diversified Utilities Fund (HDF) has been unanimously recommended to HDF’s shareholders by a subcommittee of independent directors.

In a statement issued by Hastings Funds Management, which manages HDF, the directors explained that the takeover offer of A$2.32 (€1.9 billion; $2.4 billion) per HDF security was within the A$2.30 to A$2.69 control premium range determined by independent expert Grant Samuel & Associates. The offer values HDF at A$1.25 billion.

The directors also stressed that, while rival bidder APA, Australia’s largest natural gas infrastructure operator, said it was willing to offer at least A$2.50 per HDF share, or A$1.33 billion, to take over the fund, there was no certainty of that offer materialising. This does not mean it’s game over for APA though.

“HDF is working positively with APA and may provide APA with access to appropriate due diligence in due course. However, at this point in time there is no certainty that APA will make a formal revised takeover offer for HDF,” Alan Cameron, chairman of Hastings Funds Management, said in a statement.

He added: “Your independent directors have carefully considered [the] offer and have concluded that it is presently the highest value choice available to all HDF securityholders, given the uncertainty of APA’s intention to increase its offer.”

APA’s offer differs from the Caisse/United Trust of Australia’s all-cash offer, since it includes a cash component of at least A$0.60 per share with the remainder to be paid in APA securities. The firm has been tenacious in its pursuit of HDF, despite having been rebuffed once already by HDF’s directors and having had to pledge to sell one of its pipeline assets to appease the Australian regulator.

HDF manages two gas pipelines that serve Moomba, Australia’s principal onshore gas hub.