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Business Deals

CK group leads $9.8bn bid for Australian energy company

Hong Kong conglomerate continues overseas expansion laid out by Li Ka-shing

Hong Kong tycoon Li Ka-shing, right, listens to his son Victor Li, co-managing director and deputy chairman of CK Hutchison Holdings Ltd., during a news conference in Hong Kong on March 16.   © Reuters

TOKYO -- Three listed companies under the business empire created by Hong Kong tycoon Li Ka-shing have offered roughly $12.98 billion Australian dollars ($9.8 billion) to take over APA Group, an Australian gas pipeline operator, according to an announcement submitted to the Hong Kong Stock Exchange on Wednesday by the consortium.

This is the first acquisition proposed by the Hong Kong conglomerate since Li's retirement in May, as his successor Victor Li continues to push the overseas expansion agenda laid out by his father.

The consortium -- including CK Asset Holdings Ltd., CK Infrastructure Holdings Ltd. and Power Assets Holdings Ltd. -- confirmed submission of an "indicative, non-binding conditional" proposal to acquire all the issued stapled securities of the Australian company at AU$11 per share in cash.

However, in a statement issued by APA on the same day, the company said its board members will "engage further" with the consortium regarding the offered prices to achieve the "best interests" of shareholders.

"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," Group Chairman Michael Fraser noted in the statement.

APA Group owns and operates energy infrastructure assets worth $20 billion on mainland Australia, including gas transmission pipelines that deliver half of the nation's gas usage, according to the company's website.

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