Brookfield lobs 96 billion bid for AusNet

Victorian electricity operator AusNet will open its books to persistent suitor Brookfield after receiving a $9.6 billion offer from the Canadian infrastructure investor.

The $2.50 per share cash offer follows two previous unsuccessful attempts by Brookfield. In August, the Canadian suitor lobbed a $2.35 a share bid for AusNet and subsequently raised it to $2.45 a share.

Brookfield’s latest offer is another example of Australian infrastructure assets lighting up the radar of offshore investors, with US firm KKR leading a consortium of investors in securing the $5.2 billion takeover of Spark Infrastructure in August.

ASX-listed AusNet is the largest energy distributor in Victoria and is 31.1 per cent owned by Singapore Power, with State Grid Corporation of China also holding a 19.9 per cent stake. Its shares jumped almost 20 per cent to $2.36 on news of Brookfield’s latest offer.

Ausnet owns electricity distribution and infrastructure assets across the south-east.Credit:Paul Rovere

AusNet told investors on Monday it had received an updated non-binding bid from Brookfield to buy its shares at $2.50 each, which would value its shares on issue at $9.6 billion.

Brookfield’s offer, which would be conditional upon Foreign Investment Review Board (FIRB) approval, also needs to be approved by the company’s board.

AusNet told the ASX on Monday that if Brookfield maintained its $2.50 per share offer after due diligence, it would recommend investors back the proposal in the absence of a better offer.

The announcement comes on a busy day of infrastructure investment activity, with road toll giant Transurban confirming on Monday that it had successfully bid to take full control of Sydney’s WestConnex and will buy the remaining stake from the New South Wales government for $11.1 billion.

“Following careful consideration, and consultation with its advisers, the board of AusNet considers that it is in the best interests of AusNet’s shareholders to engage further with Brookfield on the indicative proposal,” AusNet’s board said on Monday.

At this stage, either business can walk away from negotiations with seven days’ notice.

“Either party may terminate the exclusivity arrangements by giving the other 7 days’ written notice. No such notice may be given earlier than 7 weeks from today,” the board said.

AusNet is being advised by Adara Partners and Citi as financial advisers, and by Allens as legal adviser.

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Emma Koehn reports on healthcare companies for The Age and The Sydney Morning Herald. She is based in Melbourne.Connect via Twitter or email.

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