BBI and APA, which jointly own 14.2% of GasNet currently, have offered 1.545 BBI shares for each GasNet share.
BBI then plans to on-sell 50% of the company to APA, giving both an equal share in GAS.
The offer represents a value of $2.55 per GAS share, a 16c premium to GAS’s Friday closing price of $2.39. Shares in GAS were trading up 20c in morning trade at $2.59.
GAS’s suite of assets are based around 1930km of high-pressure gas transmission pipeline networks and include a gas pipeline from Esso’s Longford gas treatment plant in southwest Victoria.
GAS infrastructure also connects the Otway Basin gas fields and underground storage in southwest Victoria to major load centres in the state.
The company also owns a liquefied natural gas storage facility that provides peak shaving and security of supply services for the Victorian Gas Transmission system as well as metering services around the state.
Newcrest Mining’s Telfer gold mine in Western Australia is also serviced by a 450km GasNet pipeline from Port Hedland.
BBI chief executive Steven Boulton said the offer was compelling as it would provide GAS security holders with the opportunity to acquire securities in BBI, with its superior track record of total security holder returns and its strong growth, fully taxed distributions.
He said the takeover would result in an entity with greater market capitalisation, a more liquid security, and with a more diversified business portfolio.
“BBI is looking forward to combining its expertise in the management and ownership of domestic and international transmission and distribution infrastructure assets with APT’s strong Australian gas pipeline management experience and expertise,” Boulton said.
APA chief executive Mick McCormack said his company was pleased to be associated with BBI in expanding its strategic holding in GAS.
“This transaction meets our investment criteria and is consistent with APT’s core strategy to invest in quality energy transmission assets which enhance APT’s ability to grow unit distributions.
He said better utilisation of the Victoria-New South Wales gas interconnect facility was one of the many reasons for acquiring GAS as it would enhance its ability to compete with the Eastern Gas Pipeline and, in turn, would lead to increased flows of gas through the Moomba Sydney Pipeline.
“In addition to these benefits for our security holders, the joint bid combines APT’s expertise as an owner and manager of energy transmission assets with one of Australia’s leading diversified infrastructure funds,” said McCormack.
GAS listed on the Australian Stock Exchange in 2001.