Canada's Brookfield offers $9.6 billion for AusNet

Canada's Brookfield offers $9.6 billion for AusNet

Photo: AusNet Services, via Facebook

Shares in Victoria's electricity grid operator AusNet Services (ASX: AST) have been given a fresh spark after Canadian company Brookfield Asset Management made a $9.57 billion acquisition bid, representing a 26 per cent premium to the Melbourne-based group's last trading price.

Brookfield, which acquired aged care provider Aveo Group for $1.3 billion in late 2019 and attempted to buy Virgin Australia last year, is also known for its distressed assets investment subsidiary Oaktree Capital Management that has recently been attempting to lift its stake in Crown Resorts (ASX: CWN) and oust James Packer's Consolidated Press Holdings (CPH).

The Canadian multinational's infrastructure affiliate has offered an indicative price of $2.50 per share, compared to $1.98 at the close of trading on Friday, to be reduced to the extent that AusNet pays or declares a dividend.

AusNet has emphasised the offer is non-binding and urges shareholders not to take any action in response, but believes it is in their best interests that the board engages further with Brookfield on the indicative proposal.

"Accordingly, AusNet has decided to provide Brookfield with the opportunity to conduct due diligence on an exclusive basis to enable it to put forward a binding offer," the company said in an announcement this morning.

"To this end, AusNet and Brookfield have entered into a confidentiality deed which provides for Brookfield to conduct due diligence and for the parties to negotiate a scheme implementation deed on an exclusive basis.

"Should Brookfield make a binding offer at $2.50 per share then, subject to the parties entering into a binding scheme implementation deed on terms and conditions acceptable to AusNet, it is the AusNet Board's current intention to unanimously recommend that shareholders vote in favour of the proposal in the absence of a superior proposal and subject to an independent expert concluding that the proposed transaction is in the best interests of AusNet shareholders."

The terms of the proposal have been conveyed to AusNet's two largest shareholders, Singapore Power and State Grid.

"AusNet has strong stand-alone growth prospects that it is well positioned to pursue. As the owner and operator of 100 per cent of its assets, AusNet has a diversified portfolio with a regulated and contracted asset base of over $11 billion.

"As the incumbent primary Victorian Transmission network owner, AusNet is uniquely positioned for growth as the energy transition accelerates driven by decarbonisation."

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