CK Infrastructure Holdings agrees to acquire Australian energy infrastructure business APA Group

APA Group has entered into a conditional Implementation Agreement with CK Infrastructure Holdings Limited (CKI), CK Asset Holdings Limited (CKA), Power Assets Holdings Limited (PAH) and CKM Australia Bidco Pty Ltd under which CKM Australia Bidco, a wholly owned subsidiary of CKA, will acquire all of the stapled securities in APA under trust schemes.

APA received an unsolicited, indicative and non-binding proposal from the CKI consortium to acquire all of the stapled securities in APA through trust schemes on 13 June 2018.

If the schemes are implemented, APA Securityholders will receive AUD11.00 (US$7.98) cash per APA stapled security. If the schemes are implemented any time after 31 December 2018, APA Securityholders will receive an additional distribution of AUD0.04 (US$0.03) cents per APA stapled security for each full month in the 2019 calendar year which elapses prior to implementation of the schemes up to, and including, March 2019.

The transaction value represents a 30.5% premium to the 5 day volume weighted average price of APA stapled securities, a 31.4% premium to the 1 month volume weighted average price of APA stapled securities, an FY2017A EV/EBITDA multiple of 15.3x and an FY2018F EV/EBITDA multiple of 15.0x.

The APA Directors unanimously recommend the transaction in the absence of a superior proposal and subject to an Independent Expert concluding (and continuing to conclude) that the schemes are fair and reasonable and in the best interests of APA Securityholders.

Depending on the progress of regulatory approvals, a meeting of APA Securityholders is targeted to be held in late November 2018 to consider the schemes, with implementation and payment to APA Securityholders targeted to occur in mid-December 2018.