An infrastructure affiliate of Brookfield Asset Management has submitted a non-binding and conditional proposal to acquire all the issued shares of Australian energy company AusNet Services.
Under the terms of the A$9.6bn ($6.94bn) offer, the shares would be acquired for an indicative price of A$2.50 ($1.81m) cash for a share, by way of a scheme of arrangement.
The indicative price will be reduced to the extent that AusNet pays or declares a dividend to its shareholders before the proposed transaction is implemented.
AusNet currently operates the majority of Victoria’s transmission network infrastructure, including the state’s electricity and gas distribution network.
Last month, Brookfield proposed to acquire the shares for A$2.35 ($1.70), subsequently increasing its offer to A$2.45 ($1.77m).
AusNet informed the Australian Securities Exchange that if Brookfield maintained its A$2.50 ($1.81m) to a share offer after due diligence, it would ask its investors to support the deal.
In a statement, AusNet said: “Following careful consideration and consultation with its advisers, the Board of AusNet considers that it is in the best interests of AusNet’s shareholders to engage further with Brookfield on the indicative proposal.
“Accordingly, AusNet has decided to provide Brookfield with the opportunity to conduct due diligence on an exclusive basis to enable it to put forward a binding offer.
“To this end, AusNet and Brookfield have entered a confidentiality deed, which provides for Brookfield to conduct due diligence and for the parties to negotiate a scheme implementation deed on an exclusive basis.”
The deal is subject to several conditions, including due diligence, approval from the Foreign Investment Review Board (FIRB), and the execution of a scheme implementation deed.
AusNet’s board of directors said that there is no certainty that the indicative proposal, or the provision of access to Brookfield to conduct due diligence, would result in a binding offer for AusNet.