Chinese group lobs $13bn offer for APA

The ownership of two major gas pipelines in Western Australia could change hands after a Chinese consortium proposed a $13 billion takeover of energy infrastructure giant APA Group, one year after the same consortium bought DUET Group, which owns the Dampier to Bunbury gas pipeline.

The Hong Kong consortium, which is led by CK Infrastructure Holdings and includes CK Asset Holdings and Power Asset Holdings, has made a non-binding and indicative offer at $11 per stapled security.

CKI is owned by billionaire Li Ka-Shing.

The board of APA has made no recommendation and shareholders have been advised to take no action while the board considers the offer.

“The APA board will continue to evaluate the proposal and will update APA’s securityholders and the market as appropriate,” chairman Michael Fraser said.

“The board believes APA has a very attractive business and is well positioned to continue delivering strong results and ongoing growth irrespective of whether the proposal proceeds to an offer.”

The deal is subject to a number of conditions, including due diligence and regulatory and shareholder approval.

Following discussions with the Foreign Investment Review Board and the Australian Competition and Consumer Commission, the consortium has proposed a divestment package from APA’s Western Australian interests in the Goldfields gas pipeline, Parmelia gas pipeline and the Mondarra gas storage facility, along with a standalone management team.

Today’s proposal comes after the consortium purchased Duet in April last year for $7.5 billion.

Duet's largest asset is the Dampier to Bunbury gas pipeline, and it has also developed lateral pipelines to Chevron's Wheatstone gas project and Fortescue Metals Group's Solomon iron ore mine.

Duet also owns multiple power generation assets, mainly in remote areas, after its takeover of Energy Developments.

APA said the takeover was not conditional on these proposed divestments occurring before completion of the transaction.

APA Group is being advised by Macquarie Capital.

Shares in APA were up 20.9 per cent at $10 each at 1230pm AEDT.