The Dampier-to-Bunbury gas pipeline is set to fall into Chinese foreign hands after Australia’s Foreign Investment Review Board approved the $7.3 billion purchase of its owner, DUET Group.
A consortium led by Chinese billionaire Li Ka-shing’s Cheung Kong Infrastructure will secure control of the critical piece of the State’s energy infrastructure, which supplies domestic gas from North West projects to homes and businesses in Perth and the South West.
DUET’s two boards have backed the bid.
The company said today it had been advised by the consortium that Treasurer Scott Morrison had no objection to its proposed acquisition of DUET.
Also, the Treasurer’s approval was not subject to any conditions that the consortium considers unacceptable.
“We are pleased that a key condition in relation to the implementation of the proposed acquisition of DUET Group has now been satisfied,” the chairman of DUET Company and DUET Investment Holdings, Doug Halley, said in a statement.
“The DUET boards believe that the consortium’s proposal fully recognises the value of DUET’s operating businesses and the platform for future growth that our management team has created.”
DUET securities were 26 cents, or 9.46 per cent, higher at $3.01 at 10.15am.
Its securityholders vote on the proposed takeover at a meeting in Sydney today.
The CKI-led consortium has offered $3.03 in cash for each DUET security, comprising up to $3 for each security and a special distribution of at least three cents per security.
DUET owns and operates energy infrastructure covering generation, gas transmission, and gas and electricity distribution.
Its core assets include the Dampier-Bunbury gas pipeline, United Energy and Multinet Gas.
CKI is a global investor in infrastructure, with assets in the UK, Netherlands, Canada, New Zealand, mainland China and Hong Kong.
The consortium already has significant investments in Australia, including majority stakes in electricity networks in Victoria and South Australia as well as control of the Envestra gas distribution grid in Victoria.