DUET makes conditional offer for Brookfield Australian assets

Australian energy investor DUET Group has agreed to increase its stake in two gas distribution assets that Toronto- and New York-listed fund Brookfield Infrastructure Partners (BIP) is looking to sell.

Sydney-listed DUET Group has reached a conditional agreement with ATCO, a Canadian infrastructure group pursuing the sale of some of BIP’s Australian assets, to buy interests in those assets if ATCO succeeds in acquiring them, according to an announcement on the Australian Securities Exchange.

DUET offered A$42.5 million (€31.3 million; $44.4 million) to increase its holdings in Western Australia’s Dampier Bunbury natural gas pipeline from 60 to 80 percent, and to increase its stake in Victorian natural gas distributor Multinet Gas from 79.9 percent to 100 percent.

As part of the deal, DUET would also sell its 25.9 percent stake in Western Australian gas distributor WA Gas Networks and retire A$80 million of the company’s debt.

Multinet, WA Gas Networks, and the Dampier Bunbury pipeline are all co-owned by AET&D Holdings, which BIP acquired as part of its takeover of former Babcock & Brown vehicle Prime Infrastructure. BIP’s acquisition of Prime occurred in two parts over the past two years.

A potential sale of AET&D assets has been under consideration since BIP merged with Prime, according to a Brookfield spokesperson.

In May, ATCO announced that it had begun exclusive negotiations for a potential sale of assets owned by AET&D, which is also known as WestNet Infrastructure. At that time DUET also announced discussions with ATCO about three AET&D assets.

DUET released details regarding the conditional agreement with ATCO in response to media reports about the AET&D asset sales, according to a statement.  Both ATCO and Brookfield declined to comment on the ongoing sale negotiations.

DUET, which is a joint venture between Macquarie Group and AMP Capital, has also agreed to sell its holdings in US transmission utility Duquesne Light to the Government of Singapore Investment Corporation. A spokesperson for DUET said the company “remains committed to the regulated sector”, and added that the sale of WA Gas Networks and Duquesne, combined with the increased interests in the Dampier Bunbury pipeline and Multinet Gas would leave DUET with majority interests in three Australia-based regulated energy utilities.

BIP is part of Brookfield Asset Management, which focuses on property and renewable energy as well as infrastructure, and has about $150 billion in assets under management, according to the firm’s website.  As part of the Prime takeover, BIP also acquired assets including PD Ports, a UK ports business, the Dalrymple Bay Coat Terminal in Queensland, Australia, Tasmanian gas business Tas Gas, and WestNet Rail, a 5000-kilometre rail network in Western Australia.