AusNet in talks with Brookfield for A$2.50 apiece conditional offer

AUSTRALIAN energy company AusNet Services, which is partly owned by Singapore Power, has received an indicative, non-binding proposal from Brookfield Asset Management to acquire all of the former's shares via a scheme of arrangement.

AusNet's board has also entered into a confidentiality deed with Brookfield to allow the global asset management company to conduct due diligence and negotiate a scheme implementation deed on an exclusive basis.

Brookfield's indicative offer price is A$2.50 (S$2.45) per share in cash, which will be reduced to the extent AusNet pays or declares a dividend before the proposed scheme of arrangement is implemented.

The indicative offer price translates into a premium of 26 per cent to AusNet's closing price of A$1.98, AusNet said in a Monday bourse filing on the Australian Securities Exchange (ASX). It also represents a premium of 28 per cent to the counter's 30-day volume-weighted average (VWAP) price of A$1.95 and a 35 per cent premium to AusNet's 90-day VWAP of A$1.85.

The proposal is conditional on due diligence, Foreign Investment Review Board approval, unanimous support and recommendation by AusNet's board and the execution of a scheme implementation deed.

AusNet's board believes it's in the best interests of shareholders to engage further with Brookfield, hence the confidentiality deed. Either party may terminate exclusivity arrangements via seven days' written notice no earlier than seven weeks from Sept 20.

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Brookfield's proposal was made on behalf of an open-ended infrastructure fund it manages.

AusNet Services is 32.3 per cent owned by Singapore Power, 19.9 per cent owned by the State Grid of China, and around 48 per cent publicly owned, according to its website. The company had a secondary listing on the Singapore Exchange mainboard from 2005 to 2018.

Shares of ASX-listed AusNet were trading 17.4 per cent or 34.5 Australian cents higher at A$2.325 as at 10.10am on Monday.