Hastings set to take up Pipeline bid

13 Jul 2012, 2:57 pm   -   Source: AAP

Energy investor Hastings Diversified looks set to agree to a takeover offer by the consortium Pipeline Partners Australia

Pipeline Partners Australia looks set to succeed in its $1.23 billion takeover bid for energy infrastructure investor Hastings Diversified Utilities Fund (HDF).

Hastings on Friday announced a subcommittee of directors at Hastings Funds Management Ltd (HFML), the entity responsible for HDF, had unanimously recommended that HDF securityholders accept the offer of $2.325 per HDF security.

The recommendation is, however, subject to there being no better offer and an independent expert's report concluding the offer is fair and reasonable.

The takeover also must overcome several other conditions, including acceptance by a minimum of 70 per cent of HDF securityholders, and confirmation of HFML's performance fee.

The takeover is also subject to the normal regulatory approvals.

HFML on Friday said non-independent directors would abstain from making a recommendation on the takeover.

"The independent director that holds HDF securities has indicated that the proposal will be accepted in respect of their HDF security holdings in the absence of a superior offer as well as the receipt of an independent expert's report that concludes that the offer is fair and reasonable," the company said in a statement.

HDF is also subject to a cash-and-scrip takeover offer from APA Group, which owns gas transmission and distribution assets.

APA and Pipeline are keen to get hold of HDF's gas transmission and distribution assets.

The APA offer of $2.13, less adjustments to distributions paid from December 14, 2011, is scheduled to close on July 31, 2012.

HFML has already recommended that investors reject APA's offer.

HFML head of investor relations Simon Ondaatje on Friday said the ball was now in APA's court.

"The (Pipeline Partners) bid on the table provides certainty for all investors," Mr Ondaatje told AAP. "Our interests are what's in the interests of our security holders."

The directors are expected to provide securityholders with the Pipeline Partners takeover details and their recommendation as well as the independent expert's findings in the next few weeks.

Pipeline Partners is a consortium which includes Caisse de depot et placement du Quebec (CDPQ) and the Hastings-managed Utilities Trust of Australia (UTA).

APA issued a statement on Friday, in which its managing director Mick McCormack said his company would consider its position once it had seen Pipeline's takeover proposal.

"Our immediate focus remains continuing to work constructively with the Australian Competition and Consumer Commission in relation to the takeover offer that APA announced for HDF on 14 December 2011," Mr McCormack said.

HDF securities were down two cents to $2.34 at 1430 AEST on Friday.

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