Colonial offers $418 million for stapled securities in gas
Colonial First State Global Asset Management will make a recommended offer of $418 million to acquire all of the stapled securities in Victorian gas pipeline transmission company GasNet Australia.
The board of GasNet indicated that its directors will accept the offer for their own holdings and unanimously recommended that its stapled securityholders do the same.
The move is consistent with Colonial’s infrastructure investment strategy put in place in late 2005. GasNet will join Colonial’s growing portfolio of utility investments, which include Central Ranges Gas Pipeline, Somerton Jet Fuel Pipeline, Hazelwood Power Station and UK-based connection business Inexus.
“We are attracted to GasNet’s high quality assets, stable cash flows and the transparent regulatory environment,” said Colonial head of property and alternative investments James O’Leary.
“In addition, the transaction is important as opportunities to acquire quality domestic infrastructure assets are becoming increasingly limited.”
The planned security acquisition is backed by Colonial’s parent company the Commonwealth Bank of Australia. The proposed price is $2.88 per stapled security, with this to be reduced accordingly pending any distributions received by securityholders after the announcement. The agreement also includes provision for a break fee of $4.2 million to be payable by Colonial in certain circumstances.
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