Watchdog approves bid for Hastings
The takeover tussle for control of pipeline owner Hastings Diversified has turned up another notch.
The takeover tussle for control of pipeline owner Hastings Diversified has turned up another notch. THE takeover tussle for control of pipeline owner Hastings Diversified has turned up another notch with the decision by the competition watchdog, the ACCC, not to oppose a bid by APA Group for the company.The decision paves the way for APA to revise its bid for Hastings Diversified, which will likely close part of the gap between APA's present offer with that of the rival bid that has emerged from local and Canadian investors.Following the Australian Competition and Consumer Commission's decision, APA said it was now considering its options with regards to its offer for Hastings Diversified.APA's offer, which was launched late last year, has been subject to lengthy scrutiny by the ACCC, which has been concerned about a possible lessening of competition if the bid succeeds.Hastings Diversified controls key pipelines from the Cooper Basin in central Australia to Queensland and South Australia.APA controls key pipelines from Moomba to Sydney as well as into Brisbane, and from Victoria to Adelaide. Control of Hastings Diversified will give APA a dominant position in gas transportation into eastern Australia. It also owns pipelines in Western Australia and the Northern Territory.To allay the ACCC's concerns, APA undertook to sell the Moomba-Adelaide pipeline if its bid succeeds, as well as ensuring other pipeline connections could be made to its Queensland assets in the future.The ACCC accepted the first undertaking, but did not see the need for the latter, due in part to the ''countervailing power of the major gas producers'' in the gas market, the ACCC chairman, Rod Sims said.The ACCC said it was not convinced the acquisition would result in higher prices for shipping gas or make it more difficult to develop competing pipelines, although it was concerned about supplies to Adelaide. ''The ACCC had significant concerns that, absent the undertaking [to sell the Moomba-Adelaide pipeline], APA would own all of the pipelines servicing Moomba and have a significant interest in both of the pipelines servicing Adelaide and that this would substantially lessen competition in the supply of gas transmission pipeline services and ancillary services,'' Mr Sims said.Selling the Adelaide pipeline ''addresses these primary competition concerns by ensuring there is a separate owner of gas pipelines servicing Adelaide and Moomba'', he said. The boom in export gas projects being developed in Queensland has boosted the value of the Queensland pipeline owned by Hastings, since it links up with APA's pipeline, which supplies Brisbane.APA is offering 0.326 APA shares plus 50? in cash for each Hastings share held, less any dividends paid by the target during the bid. APA already has a 20 per cent holding.Another bid has been outlined by Pipeline Partners Australia, which is a consortium of local and Canadian investors. It is offering $2.325 in cash. It has an 8 per cent stake in the target.