APA Group has made a cash offer to takeover the Ethane Pipeline Income Fund (EPX) which owns the Moomba to Sydney Ethane Pipeline.
APA currently owns 6.08 per cent of EPX securities and the offer is for all securities that APA does not already own.
The Ethane Pipeline Income Fund owns the Moomba to Sydney Ethane Pipeline and is externally managed by APA Group through a Management Services Agreement.
APA also provides operation and maintenance services to EPX.
APA’s Chairman, Len Bleasel, said that APA is a natural owner of EPX and the Moomba to Sydney Ethane Pipeline and is best placed to offer full value to EPX securityholders.
“The addition of the Ethane Pipeline to APA Group’s portfolio of assets will extend and further diversify APA Group’s investment in related energy infrastructure,” Mr Bleasel said.
“It also enables APA Group to expand our footprint into transporting alternate fuels, including potentially liquids in the longerterm, enhancing our position as an infrastructure owner in Australia’s growing energy markets.”
If the offer is accepted EPX securityholders will receive A$1.88 cash per EPX security and will be entitled to retain the declared EPX distribution for the March 2016 quarter of 3.25 cents per EPX security if eligible on the distribution record date.
The independent directors of the Ethane Pipeline Income Fund, Nancy Fox and Rick Coles, have unanimously agreed to recommend APA’s offer in the absence of a superior offer and subject to an independent expert agreeing that the offer is fair and reasonable.
The offer will not be subject to any defeating conditions and once the offer opens, securityholders will have the ability to accept immediately and then be paid the within 5 business days from receipt of valid acceptance.
In addition, APA may acquire EPX securities on market, via its appointed broker, Citigroup Global Markets Australia, until the close of the offer period.
Given APA’s role in providing funds management services to EPX and operation and maintenance services to the Moomba to Sydney Ethane Pipeline, APA has put in place appropriate protocols to ensure those involved in the management of EPX are excluded from any of APA’s deliberations in relation to the offer.