A Hong Kong-based consortium is planning to acquire DUET Group, which owns Western Australia’s Dampier Bunbury Pipeline, Victorian gas distribution business Multinet Gas and a 66 per cent stake in United Energy.
The consortium, comprising Cheung Kong Infrastructure (CKI), Cheung Kong Property (CKP) and Power Assets Holdings (PAH), has entered into a Scheme Implementation Agreement for the acquisition of DUET.
Completion of the $7.4 billion acquisition is conditional upon the approval of the Foreign Investment Review Board of Australia and DUET’s security-holders.
The boards of DUET has unanimously recommended that DUET securityholders vote in favour of the scheme.
Speaking on behalf of DUET’s boards, Independent Chairman Mr Doug Halley said, “On 10 November 2016, the consortium approached DUET with a confidential, indicative, non-binding proposal to acquire DUET for $2.90 per stapled security, subsequently increased to $3.00 per stapled security as announced in December 2016.
“Following a period of non-exclusive due diligence, the consortium confirmed its offer of $3.00 per stapled security and subsequently agreed to the payment of a 3c special distribution by DUET.
“DUET’s boards consider that the total cash proceeds of $3.03 per stapled security, inclusive of a special distribution payment by DUET, fully recognise the value and future growth platform that our management team has created and the operating and financing synergies available to the consortium.”
The consortium said DUET’s energy utility assets presented an attractive investment opportunity with good growth potential.
CKI said, “Providing a steady income on a long-term basis through its regulated and contracted revenue, DUET offers a long track record of stable performance.”
DUET is an owner and operator of energy utility assets predominantly in Australia, and also in the United States, the United Kingdom and Europe.
It comprises four separate legal entities that are traded together as stapled securities on the ASX: DUET Finance Trust; and three Australian public companies, DUET Finance Limited, DUET Company Limited and DUET Investment Holdings Limited.
DUET has a 100 per cent shareholding in Multinet Gas, a gas distribution business located in Victoria, Australia.
It operates a regulated network covering 1,860km2 of the eastern and south-eastern suburbs of Melbourne, the Yarra Ranges and South Gippsland.
DUET also owns a 66 per cent stake in United Energy, an electricity distribution business in Victoria, Australia.
The electricity distribution network covers 1,472km2 of south-east Melbourne and the Mornington Peninsula, transporting electricity from the high voltage transmission network to residential, commercial and industrial electricity users.
Although covering only a geographically small area, United Energy serves around 25 per cent of Victoria’s population.
DUET fully owns Energy Developments, an international provider of safe, clean, low greenhouse gas emissions energy and remote energy solutions.
Energy Developments manages an international portfolio of over 900MW of power generation facilities in Australia, the United States and Europe, using a range of fuel sources operating in three main areas: remote energy, landfill gas and waste coal mine gas.
DUET fully owns the Dampier Bunbury Pipeline, Western Australia’s principal gas transmission pipeline.
The Dampier Bunbury Pipeline is the only pipeline connecting the natural gas reserves of the Carnarvon and Browse basin on Western Australia’s North West Shelf with industrial, commercial and residential customers in Perth and the surrounding regions.
DUET also has full ownership of DBP Development Group, which was established to leverage the pipeline engineering and operating skill of DBP to build, own, and operate new unregulated gas pipelines.