Brookfield ups bid for AusNet (ASX:AST) to win the deal

Electricity operator AusNet (ASX:AST) has entered into a scheme implementation deed with Brookfield after agreeing to its $10.2 billion bid. AusNet confirmed the offer values its shares at $2.65 each, a step up from Brookfield’s previous offer of $2.50 around a month ago.

Brookfield comprises a consortium of co-investors including, Sunsuper, Alberta Investment Management Corporation, Province of Alberta Canada and Healthcare of Ontario Pension Plan. 

One note in Brookfield’s offer is that AusNet must cease all discussions with all other competing parties. Consequently, it has terminated its due diligence process with energy giant APA (ASX:APA) after APA made an offer of $2.60 per Ausnet share in a competing bid last month.

Although, AusNet did state that “if APA wishes to make a further proposal, (it is) free to do so, as is any other party”.

The deal with Brookfield values AusNet at an equity value of $10.2 billion and an enterprise value of $17.8 billion.If the scheme is implemented, AusNet shareholders will receive $2.65 cash per share plus additional consideration if the scheme has not been implemented before March 31 next year.

While the deal is subject to various conditions, the AusNet board unanimously recommends that shareholders vote in favour of the scheme. AusNet will be required to pay Brookfield a break fee of $101,674,267, being 1 per cent of the equity value of AusNet as implied by the Brookfield binding offer, if the AusNet Board ultimately recommends a competing, superior proposal.

Singapore Power, which currently owns 32.74 per cent of AusNet shares has informed AusNet that it supports the scheme and intends to vote in favour of it.

Shares in AusNet (ASX:AST) are trading 5.3 per cent higher at $2.60.