Australia’s largest natural gas infrastructure business APA Group (APA) has launched a bid to take full control of Envestra (ENV), lobbing a sweetened offer valuing the pipeline operator at $2.2 billion.
In a statement to the Australian Securities Exchange, APA, which owns 33% of Envestra, said it had put forward a revised proposal which implies a value of $1.171 per Envestra share.
APA said the progression follows discussions with Envestra and some limited due diligence.
Under the proposal, Envestra shareholders will be given a choice of either 0.19191 APA securities per Envestra share, or a combination of APA securities and cash, whereby the cash component will be offered through a “mix and match facility”, subject to an overall cap of $241 million.
APA said Envestra shareholders would be entitled to receive the dividend of 32 cents per share expected to be paid by Envestra in April 2014.
APA securities issued as part of the offer prior to June 30, 2014 would be entitled to APA’s final distribution for fiscal 2014.
"The independent board committee of Envestra has agreed by majority to proceed with the steps necessary to put the APA proposal before Envestra shareholders for their approval," the statement said.
Those steps include APA and Envestra undertaking mutual confirmatory due diligence; Envestra seeking binding confirmations from its financiers; and the appointment of an independent expert to opine on whether the proposed scheme is fair and reasonable and in the best interests of Envestra’s shareholders.
Following completion of these steps, a recommendation in relation to the proposed scheme of arrangement will be made by the independent directors on the Envestra Board.
APA said it expects that a scheme of arrangement would be possible to implement by June 2014.