Caisse enters race for Hastings fund

The Canadian pension has teamed up with Utilities Trust of Australia to offer A$1.25bn for Australian gas pipeline operator Hastings Diversified Utilities Fund, larger than a previous hostile bid from Australia’s APA Group. The latter has, however, extended its offer to Hastings for another two months.

A bidding war is brewing Down Under after a consortium of Canada’s Caisse de depot et placement du Quebec (Caisse) and Utilities Trust of Australia aggressively entered a takeover battle for gas pipeline owner Hastings Diversified Utilities Fund (HDF).

The consortium, known as Pipeline Partners Australia, is offering a non-binding A$2.35 (€1.83; $2.35) a share for HDF, valuing it at A$1.25 billion, larger than a competing, hostile takeover bid from APA Group. The latter, which bills itself as Australia’s “largest natural gas infrastructure business”, is offering a combination of cash and shares which currently values HDF at A$1.1 billion. APA already owns 20.7 percent of HDF.

HDF’s board of directors, which rejected the APA Group’s bid last December, said it had granted Pipeline Partners Australia 45 days to conduct due diligence on HDF. The APA Group said it was reviewing the offer from Pipeline Partners Australia and gave HDF shareholders another two months to consider its own offer for HDF. The offer from Pipeline Partners Australia requires acceptance by 70 percent of HDF’s shareholders.

Utilities Trust of Australia (UTA), one half of the Pipeline Partners Australia team, is, like HDF, also managed by Hastings Funds Management (HFML), which prompted its chairman, Alan Cameron, to state:

“UTA is governed by an independent trustee board comprised of a majority of directors appointed by its unitholders. HFML is not advising UTA in relation to this proposal. HDF and the consortium have received independent advice in relation to all aspects of the proposal. Hastings continues to apply rigorous corporate governance procedures and has put in place appropriate information barriers to protect the interests of all HDF securityholders.”

Regarding Pipeline Partners Australia’s takeover bid, Cameron said that “HDF remains focused on optimising value for securityholders and will continue to act in the best interest of its securityholders”.