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The Ausnet Services Ltd (ASX: AST) The stock price turned green on Monday after the electric utility made a key announcement earlier.
Ausnet said Brookfield Asset Management has made a non-binding offer to acquire all of its issued shares at a price of $ 2.50 per share.
The Ausnet share price opened 20% higher at $ 2.38 this morning.
Let’s investigate further.
What was in the Ausnet announcement?
Ausnet said it had received an “unsolicited, indicative, non-binding and conditional proposal” from Brookfield to acquire all of its issued shares, by way of a plan agreement.
Brookfield offered the offer at $ 2.50 per share, which is a 26% premium over Ausnet’s closing price of $ 1.98 on Friday and a 35% premium over its weighted average price. over 30 days, according to the press release.
The revised proposal was made on behalf of an infrastructure fund that Brookfield manages and follows two previous conditional proposals from Brookfield. The first was on August 30 for $ 2.35 / share, and the next offer was for $ 2.45 / share.
So it looks like Brookfield is hungry for the $ 11 billion in assets 100% owned and operated by Ausnet – which would likely fit into its diversified infrastructure portfolio, a giant with $ 95 billion in assets under management ( AT M).
The indicative proposal is subject to several conditions, including due diligence, regulatory approval and the unanimous support of Ausnet’s board of directors.
Ausnet said in the announcement:
After careful consideration and consultation with advisers, Ausnet’s board of directors considers it to be in the best interest of Ausnet shareholders to further engage with Brookfield on the indicative proposal.
Therefore, Ausnet has decided to offer Brookfield the opportunity to perform due diligence on an exclusive basis in order to allow it to make a binding offer.
If Brookfield makes the offer binding at $ 2.50 per share, the current intention of Ausnet’s board is to “unanimously recommend that shareholders vote in favor of the proposal.”
The company said a “superior proposition” was not ruled out if another party took an interest in Ausnet’s assets.
Given Brookfield’s size – it has US $ 626 billion in assets under management – and its aggressive style of trading, it could be an interesting race if it were to happen.
Investors appear to have bought on the news today, pushing the Ausnet share price higher.
Ausnet shares are now trading at $ 2.34 apiece, up 18% from the market opening.
Ausnet share price overview
The Ausnet share price has had a difficult year so far, showing a 13% return since January 1.
It has also faced headwinds over the past 12 months, having climbed only 6.5% during that time.
These returns delayed the S & P / ASX 200 Index (ASX: XJO) a gain of about 25% over the past year.