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Bidding war for Envestra

May 09, 2014

Adelaide-based natural gas distributor Envestra is the target of a $2.37 billion takeover bid from a Hong Kong consortium, rivalling a $2.1 billion offer from a local gas distributor.

Envestra said it would consider a conditional off-market cash offer from members of the Cheung Kong Group to acquire all remaining stock at $1.32 per share.

Cheung Kong Infrastructure Holdings, which is part of the consortium, currently holds a 17.5 per cent stake in Envestra – which distributes gas to more than 1.2 million Australians.

Envestra shares have been placed in a trading halt, and last traded at $1.13.

The new proposal is conditional on the bidders being satisfied with the results of a due diligence process, and approval from Envestra’s board and the Foreign Investment Review Board.

Envestra said it will be reconstituting its Independent Board Committee, which would exclude the APA and CKI nominated directors, to consider both the Consortium Proposal and the APA Group scheme of arrangement.

Envestra will apply to the Federal Court for an adjournment of the scheme meeting previously scheduled for 13 May 2014.

A further announcement on the adjournment will be made following the court hearing, which is expected to be held on Friday, 9 May, the company said.

“At this time, Envestra shareholders do not need to take any action in relation to the Consortium Proposal. Envestra will continue to update shareholders as appropriate.”

Goldman Sachs is acting as financial adviser and Johnson Winter & Slattery is acting as legal adviser to Envestra.

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