Li firms set to take over Envestra as rival bidder sells them its shares

The main obstacle has been cleared for a consortium controlled by Li Ka-shing, Asia's richest man, to acquire Envestra, one of Australia's largest distributors of natural gas.

APA, Australia's largest natural gas infrastructure company, has abandoned its own takeover bid and agreed to sell its one-third stake in Envestra to the consortium at its cash offer of A$1.32 (HK$9.48) per share, Envestra said yesterday.

The Li companies - Cheung Kong Infrastructure Holdings, Power Assets Holdings and parent firm Cheung Kong (Holdings) - will pay A$784 million for APA's 594 million Envestra shares.

Prior to the transaction, the group owned 39.14 per cent of Envestra. It will now own more than 72 per cent.

"The cash offer by the consortium well exceeded our valuation of the Envestra business, even at full ownership," APA managing director Dick McCormack said in a statement. "While our rationale for owning the Envestra business remains sound, APA assessed the value proposition of the offer and concluded that selling out of this investment and redeploying the proceeds in other opportunities will provide better longer-term value for APA security holders."

Cheung Kong shares yesterday closed 0.07 per cent lower at HK$143.10, while CKI rose 0.54 per cent to HK$55.40 and Power Assets added 1.94 per cent to HK$70.80. The Hang Seng Index slid 0.8 per cent.