Just 23 minutes before the close of trading for the week, Ausnet Services Ltd (ASX: AST) announced its Confidentiality Deed with Brookfield Asset Management “will be of no force” without further amendment.
The ruling opens the door for APA Group (ASX: APA) to be granted an answer on its $2.60 offer for Ausnet no later than 5:00 pm AEDT on Tuesday 19 October.
What did the Takeover Panel announce?
The Australian Government Takeovers Panel has made “an order that the no-talk restriction in the Confidentiality Deed will be of no force and effect unless the Confidentiality Deed is amended to include a ‘fiduciary out’ in relation to the no-talk restriction”.
Effectively, Ausnet either needs to amend the agreement or respond to APA.
Rewind for a minute
If you’re a little confused by all the events and legal jargon, I don’t blame you.
Simply put, Brookfield and APA have been battling for control of Ausnet.
After several offers by both sides, Brookfield made a $2.50 cash per share bid for Ausnet. Subsequently, Ausnet granted Brookfield access to its books by entering into a Confidentiality Deed.
The next day, APA announced a $2.60 offer of mostly shares in APA and a small cash component. However, Ausnet said it could not respond to APA’s offer until the exclusivity period with Brookfield ends.
“AusNet will consider the APA Revised Indicative Proposal and has the ability to engage with APA following completion of the exclusivity period”
Ausnet – clearly peeved off with being asked to wait up to eight weeks for an answer to its a superior offer (at least on paper) – went to the Takeover Panel.
Fast forward to today, the Takeover Panel has ruled the agreement will be of no force. As a result, Ausnet should give Ausnet a response by Tuesday.
However, APA need not wait. Ausnet has decided against an amendment and will proceed with due diligence with APA and Brookfield.
What next for Ausnet?
After it looked like Brookfield was set to win this battle, APA is back in the hunt.
It’s now a waiting game for Ausnet shareholders.
Either APA or Brookfield could increase their respective offers. One may walk away after having a look at Ausnet’s books. A third bidder may emerge?
In summary, a multitude of outcomes exists now.
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