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APA Group a $13bn Chinese takeover target

Shares in energy infrastructure giant APA Group have soared following a $13 billion takeover proposal from a Chinese consortium led by CK Infrastructure Holdings.

APA shares were up $1.98, or 23.9 per cent, to $10.25 at 1105 AEST after coming out of a trading halt imposed ahead of the bid announcement.

APA Group has opened its books for the CKI-led consortium to conduct due diligence after its proposed cash offer of $11 per stapled security.

APA’s assets include gas pipelines and storage, wind farms and the Darling Downs solar farm.

The proposal offers a 33 per cent premium to the $8.27 price prior to Wednesday’s market open.

APA chairman Michael Fraser said the board would continue to evaluate the proposal, which includes – but is not conditional upon – the divestment of several gas assets.

“The board believes APA has a very attractive business and is well positioned to continue delivering strong results and ongoing growth irrespective of whether the proposal proceeds to an offer,” Mr Fraser said.

CK Infrastructure Holdings already owns Australian assets including Australian Gas Networks, Duet Group, and a 51 per cent stake in SA Power Networks.

The gas divestments are designed to allay any concerns by the competition watchdog, which would have to approve any deal.

A takeover would also be subject to Foreign Investment Review Board approval and the CKI consortium has already had talks with FIRB and the Australian Competition and Conusmer Commission about possible gas infrastructure divestments if a deal eventuates.

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