Australian gas pipeline company APA Group has been granted the due diligence access it sought from Hastings Diversified Utilities Fund to enable it to evaluate raising its takeover offer for the company.
APA said last week that it planned to lift its offer for HDF to a total of A$1.34 billion ($1.42 billion), trumping a rival proposal from Pipeline Partners Australia. A subcommittee of HDF's independent directors subsequently urged its security holders to accept PPA's cash offer of A$2.325/security, which values the target at A$1.232 billion, in the absence of a superior proposal.
APA's revised proposal would include an increased offer of at least A$2.50 per HDF stapled security, with a cash component of at least A$0.60, plus a fixed amount of APA securities. Including a distribution from HDF of A$0.025/security, the new offer totals at least A$2.525/security.
"HDF has agreed to suitable terms and conditions for the disclosure of information to APA while APA has also agreed to provide HDF with confidential information in relation to its financial position and outlook," HDF said in a statement Monday. "HDF securityholders should be aware that there is no certainty that a superior offer may eventuate from APA as a result of due diligence."
HDF owns Epic Energy, which in turn operates several gas transmission pipelines, including the South West Queensland Pipeline, the Queensland to South Australia/New South Wales Link and the Moomba to Adelaide pipeline. APA owns a number of gas transmission pipelines in Australia, including the Moomba to Sydney pipeline, the Victorian Transmission System and 50% of the SEA Gas pipeline.
