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Hong Kong's CK Asset offers to buy Australia's APA Group under A$13B scheme

A consortium of CK Asset Holdings Ltd. and three of its subsidiaries is offering to buy Australia-listed natural gas infrastructure business APA Group for a cash consideration of A$11.00 per security.

CK Asset, CK Hutchison Holdings Ltd., CK Infrastructure Holdings Ltd. and Power Assets Holdings Ltd. confirmed that they submitted an indicative nonbinding conditional proposal for APA Group. The Hong Kong-based consortium noted that the proposal is not conditional on other shareholders' approval, and may be undertaken only by the parent company. It added that it does not guarantee that an agreement or a formal binding proposal will result from the offer.

In its statement, APA Group said it has entered into a confidentiality agreement that allows CK Infrastructure to undertake due diligence on the company on a nonexclusive basis.

The APA Group board is not making any recommendations on the offer yet, but noted that the indicative A$11.00-per-security offer, which also permits for a distribution not exceeding 24.0 Australian cents per security, warrants further engagement with the consortium.

The Australian Financial Review reported June 13 that the per-security equivalent to the A$13 billion bid reflects a 33% premium to APA Group's latest closing price of A$8.27. In a separate same-day report, the publication added that the target tapped Macquarie Capital and law firm King & Wood Mallesons as advisers.

APA Group has a portfolio worth over A$20 billion and says it delivers 50% of Australia's natural gas usage, according to its website.