Li Ka-shing’s Cheung Kong Infrastructure makes $7.3 billion offer for Duet Group
A company led by Asia’s second-richest man Li Ka-shing has made a $7.3 billion bid for infrastructure owner Duet Group, just four months after the Turnbull government blocked the purchase of NSW’s poles and wires business by the same group.
Duet Group confirmed receipt of a takeover offer from Cheung Kong Infrastructure on Monday.
“The boards of Duet Group are currently evaluating the proposal and at this time security holders are advised to take no action as there is currently no certainty the proposal will proceed further,” the company said in a statement to the Australian Securities Exchange.
Cheung Kong Infrastructure is offering $3 per share for Duet Group in a deal that values the company at $7.5 billion.
The offer represents a 27 per cent premium to the company’s closing price on Friday of $2.35.
Sources told Business Day the board of Duet Group received the offer late last week.
The offer is incomplete and only indicative, the sources said.
The board, led by chairman Doug Halley, will now have to weigh up the offer and decide whether to allow Cheung Kong Infrastructure to conduct due diligence.
Duet Group will also need to win the backing of its shareholders, which includes $55 billion industry super behemoth Unisuper with a 16 per cent stake. Lazard, Blackstone and Vanguard are also shareholders in the company.
The deal will be subject to approval by the Foreign Investment Review Board.
If successful, the deal will see Cheung Kong Infrastructure add to its suite of major energy infrastructure assets around Australia.
Duet Group owns Multinet Gas, one of three Victorian gas distribution networks, and two-thirds of Victorian-based electricity distributor United Energy.
It also owns the Dampier Bunbury Pipeline, a major natural gas transmission pipeline in Western Australia.
Duet’s other assets include DBP Development Group which builds, owns and operates pipelines and Energy Developments, an international group that provides clean energy and remote energy solutions.
Cheung Kong Infrastructure already owns several major infrastructure assets in Australia, including a controlling stake in South Australian electricity distributor ETSA.
Cheung Kong Infrastructure and another company linked to Mr Li, Power Asset Holdings, own CHEDHA Holdings which in turn holds Citipower and Powercor.
Hailing from Hong Kong, Mr Li is a self-made billionaire and the 20th richest person in the world with a fortune estimated at $43 billion.
Cheung Kong Infrastructure, which is listed in Hong Kong, was shortlisted as a bidder for the long-term lease of Ausgrid earlier this year.
Chinese government-owned China State Grid Corporation was also shortlisted as a bidder.
However, the federal government knocked back the bidders due to national security concerns about a China state-owned company owning the vital infrastructure.
Mr Li’s Cheung Kong Infrastructure is not state-owned but the Turnbull government had concerns about his links to senior government officials in China, a view that was widely criticised in business circles.
The stake in Ausgrid was later purchased by AustralianSuper and IFM Investors for $16.2 billion.
During 2016, Duet completed two capital raisings totalling $1.88 billion.
It used the raisings to fund the acquisition of Energy Developments for $1.4 billion and the remaining 20 per cent of the Dampier Bunbury Pipeline it did not already own.
Li is the important part of his name..and the last bit i prefer to say it as “ka-ching”..the sound of a cash register..
“A company led by Asia’s second-richest man Li Ka-shing has made a $7.3 billion bid for infrastructure owner Duet Group, just four months after the Turnbull government blocked the purchase of NSW’s poles and wires business by the same group.”
fairly important infrastructure i would have thought?
“Duet Group will also need to win the backing of its shareholders, which includes $55 billion industry super behemoth Unisuper with a 16 per cent stake. Lazard, Blackstone and Vanguard are also shareholders in the company.”
the usuals..lazard and blackstone..