DataRoom AM: APA’s pipeline triumph

APA Group will likely tap investors to help fund its offer for BG Group’s Queensland gas pipeline, while Woodside edges closer to buying a string of assets held by Apache Energy.

After a drawn-out auction process it appears that APA Group has won the day in the fight for BG Group’s Queensland pipeline. But what will it pay for the privilege of ownership?

Elsewhere, Woodside Petroleum makes a gas and oil play at what it hopes is the bottom of the cycle, Santos faces capital raising pressure, Bradken edges closer to its suitors and more big names are linked to the NSW power privatisation program.

APA Group has won the race for control of BG Group’s highly sought-after Queensland gas pipeline, with a deal tipped by The Australian Financial Review to be announced today. The asset has long been valued at about $4 billion by analysts, though there are rumours APA’s bid may have gone as high as $5.5bn. The ASX-listed firm edged out consortia led by AMP Capital and IFM and will now reportedly tap investors for as much as $1.8bn this morning to fund its offer.

It marks a handy, if expensive, victory for APA after it fell short in the $2.4bn battle for Envestra earlier this year at the hands of HK rival Cheung Kong Infrastructure.

Woodside Petroleum appears to have won a bidding battle of its own, trumping Harbour Energy in the race for assets put on the block by US-based Apache Energy. Among the assets are a 13 per cent stake in the Wheatstone LNG project in WA -- worth about $2bn, the proposed Kitimat LNG project in Canada and a grouping of smaller oil and gas assets in WA that may include a stake in the highly prospective Phoenix South Discovery.

Woodside’s one-on-one negotiations with Apache are expected to see a multi-billion dollar deal finalised before Christmas.

Meanwhile, fellow ASX-listed energy giant Santos is facing pressure on the capital front as investment banks urge the firm to raise cash before its stock falls any further. For now Santos is sticking firm, but should it capitulate to the urgings, there will be no shortage of banks ready to step in and, ahem, help.

And the energy rumblings don’t end there, with a new player linked to the privatisation of power assets in NSW. British-based Universities Superannuation Scheme is believed to be looking for partners on a bid, while Abu Dhabi Investment Board and Quebec’s Caisse de dépôt provincial institution may also be on the rapidly growing list of prospective buyers.

Elsewhere, takeover target Bradken is tipped by the AFR to let Bain Capital and Pacific Equity Partners return to its data room by week’s end as key shareholders push the firm toward backing the recent $872m takeover offer. However, the mining services firm is seen only allowing access to its suitors if they offer assurance their $5.10 a share offer will not be reduced.

Finally, construction software company Aconex has seen its shares sink 5 per cent on its ASX debut in the latest sign of float fatigue, while the AFR reports that Dodo founder Larry Kestelman has surfaced as a key backer of customer service platform Yatango, which has plans to list in the first half of 2015.

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