Caisse tables binding bid for Hastings fund

The Canadian pension, together with Utilities Trust of Australia, has made its previous A$1.25bn offer for Australian gas pipeline operator Hastings Diversified Utilities Fund binding. All eyes are now on rival bidder APA Group’s ability to come up with a higher offer.

Canada’s Caisse de depot et placement du Quebec (Caisse), a Canadian pension, and Utilities Trust of Australia, a fund, have submitted a binding offer for gas pipeline owner Hastings Diversified Utilities Fund (HDF), the latter announced on Tuesday.

The consortium, known as Pipeline Partners Australia, is offering A$2.325 (€1.929; $2.358) per HDF share, in line with a previous non-binding offer of A$2.35 per share (minus a 2.5 cent distribution to be paid next month) that valued HDF at A$1.25 billion.

“The subcommittee of independent directors is currently considering the terms of the proposal and intend to make a decision within a week as to its recommendation to HDF securityholders,” Hastings Funds Management, which manages HDF, said in a statement to the Australian Stock Exchange.

All eyes are now on rival bidder APA Group’s ability to trump Pipeline Partners Australia’s offer. The latter, which owns 19.3 percent of HDF, had tabled a hostile bid for the fund last December, subsequently rejected by HDF’s board of directors.

But any increased offer from APA is also contingent on an upcoming decision from the Australian regulator to allow it to divest an important Australian pipeline. The regulator had expressed concern regarding APA’s original bid for HDF, since it would mean that APA would control every important pipeline outside of Western Australia, according to local media sources.

Still, HDF’s directors are leaving the door open for a higher bid: 

“Any recommendation by the independent directors to HDF securityholders to accept the offer [from Pipeline Partners Australia] would be 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,” HDF said in a statement.