Date
24 September 2017
Li Ka-shing is seeking to boost his infrastructure and resources assets in overseas markets. Photo: Bloomberg
Li Ka-shing is seeking to boost his infrastructure and resources assets in overseas markets. Photo: Bloomberg

Li Ka-shing eyes another overseas deal

Tycoon Li Ka-shing’s Cheung Kong Group has joined the bidding for Australian natural gas distributor Envestra, signaling its ambition to scale up its assets in the resource-rich continent. 

A consortium comprising Cheung Kong Infrastructure (CKI, 1038.HK), Cheung Kong (Holdings) and Power Assets Holdings (0006.HK) has offered A$1.32 a share in cash for Envestra, valuing the firm at about A$2.37 billion (US$2.2 billion).

The offer trumps an earlier bid from Australia’s APA Group, which had made a cash and scrip offer that was initially valued at A$1.17 per share.

APA is currently Envestra’s biggest shareholder with 33 percent stake, while CKI is the second-largest holder with 17.5 percent, according to Bloomberg News.

Envestra has 23,000 kilometers of pipelines that supply gas to customers, mostly in the states of Victoria and South Australia.

APA reached a deal with Envestra in December to buy the rest of the company after raising an earlier offer. Under the deal, shareholders have the option of receiving either 0.1919 APA shares for each Envestra share, or a combination of stock and cash, according to Bloomberg.

CKI’s representatives on the Envestra board had recommended in March that holders vote against APA’s offer because it is not in their interests, the report said. 

If the Cheung Kong Group succeeds in its bid, its overseas infrastructure assets portfolio will get a significant boost. CKI already owns power and water networks in the UK and Australia after a flurry of acquisitions in recent years. 

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RC

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