Brookfield makes $7bn bid for Australian power company

Sep 20, 2021 | News

AusNet Services, an Australian power transmission and distribution company, agreed to let Brookfield Asset Management conduct due diligence after an improved $7bn takeover bid by the Canadian private equity firm.

AusNet said in a statement on Monday that Brookfield’s latest offer of acquiring the company’s shares at AUD2.50 per share came after it had originally made an offer of AUD2.35 per share on 30 August, which was subsequently revised to AUD2.45 per share.

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“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 [of AUD2.50 per share],” the statement said.

Seven weeks to decide

The latest offer is a 26% premium to AusNet’s closing price of AUD1.98 on 17 September.

Brookfield will have seven weeks to conduct due diligence on AusNet before either firm can give seven-days’ notice to terminate the exclusivity agreements.

AusNet’s board said that it intends to unanimously recommend shareholders to vote in favour of Brookfield’s offer, should the private equity firm go ahead with the offer after the due diligence.

Transaction not certain

However, the Australian company’s board also told shareholders that there is no certainty that the proposal will translate into a transaction.

“AusNet has strong stand-alone growth prospects that it is well positioned to pursue. As the owner and operator of 100% of its assets, AusNet has a diversified portfolio with a regulated and contracted asset base of over AUD11bn. As the incumbent primary Victorian Transmission network owner, AusNet is uniquely positioned for growth as the energy transition accelerates driven by decarbonisation,” the Australian company’s statement added.

AusNet’s shares surged after the announcement. During late afternoon trading in Sydney, AusNet’s shares were 17.67% higher at AUD2.33 per share.

Source: Capital

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