Envestra’s Independent Board Favours Takeover Bid From CKI

by / No Comments / 45 View / May 30, 2014

The Independent Board Committee of Australian gas distributor Envestra Limited has unanimously recommended that the company’s shareholders accept the takeover bid from a consortium linked to Li Ka-shing. He is said to be a Hong Kong tycoon and Asia’s richest man.

Image from ceoconnectz.com

Image from ceoconnectz.com

The members of the said committee were:

  • Chairman of the Board John Allpass,
  • Managing Director Ian Little,
  • Fraser Ainsworth, and
  • Olaf O’Duill.


The company entered today into a Bid Implementation Agreement with a consortium to buy all of Envestra’s shares for A$2.37 billion cash or its equivalent of UD$2.20 billion. This just means that each Envestra share will receive A$1.32.

The consortium is comprised of:

  • Cheung Kong (Holdings) Limited,
  • Cheung Kong Infrastructure Holdings Limited,
  • Power Assets Holdings Limited, and
  • CKI ENV Investments Pty Ltd.

CKI ENV is the bidding company.


A Little Background Story

Image from portadelaidefc.com.au

Image from portadelaidefc.com.au

Envestra shareholder Australian Pipeline Ltd. had made a A$2.20 billion all-stock offer for the company. This domestic rival of Envestra happens to own a third of the company. CKI EVN, also a shareholder of Envestra, opposed the sale. In the end, it made a surprising move when it submitted a counter offer, which it submitted on May 9.


Envestra’s Dividends

Envestra and CKI ENV have also agreed that all of Envestra’s shareholders will receive a final dividend. The shareholders will receive up to $0.035 for every share for the financial year ending on the end of June of this year. However, that dividend should be determined on or before August 21 of this year.


Conditional Offer

Envestra and CKI EVN have revealed that the offer is conditional on many factors. One of these is the approval of the Foreign Investment Review Board. Also, Envestra’s financiers should not declare “change of control” as a result of this takeover bid.


APA Group Scheme Agreement

Since Envestra has signed today an agreement with CKI EVN, Envestra’s Scheme Implementation Agreement, which was announced on March 4, 2014, is terminated today.

The Federal Court has also ordered today that the meeting, which was supposed to be on June 13, regarding the APA Group Scheme Agreement will be cancelled.

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