By Robb M. Stewart
MELBOURNE, Australia--Australia's government doesn't plan to stand in the way of the 7.3 billion Australian dollar (US$5.5 billion) takeover of utility Duet Group (DUE.AU) by Hong Kong tycoon Li Ka-shing's Cheung Kong Infrastructure Holdings Ltd. (1038.HK).
In a regulatory filing Friday, Duet said the CKI-led consortium had been advised that the federal treasurer had no objection to the deal under the country's Foreign Acquisition and Takeovers Act.
Approval from Canberra was a significant condition to the acquisition proceeding and there had been some uncertainty among investors after Duet's board in mid-January unanimously backed the A$3-a-share bid from CKI and related entities Power Asset Holdings Ltd. (0006.HK) and Cheung Kong Property Holdings Ltd. (1113.HK).
The agreement came just months after Australia's conservative government knocked back separate bids by CKI and state-owned State Grid Corp. of China to take control of electricity network operator Ausgrid, citing national security concerns. The government has said it welcomes foreign investment, including from China, although earlier last year it also rejected an offer for S. Kidman & Co., the country's largest cattle ranch, from a group headed by a Chinese conglomerate.
A takeover of Duet will give CKI control of assets that include the Dampier Bunbury natural-gas pipeline, which connects gas reserves on Western Australia state's offshore North West Shelf with customers in Perth and surrounding areas, and gas and electricity distribution networks in the southeast around Melbourne.
Hong Kong-based CKI is already one of the largest overseas investors in Australian infrastructure. It owns SA Power Networks, an electricity distributor in the state of South Australia, Melbourne electricity supplier CitiPower, gas distributor Australian Gas Networks Ltd. and an electricity distributor and a renewable-energy transmission business in Victoria state.
Duet's shareholders are due to vote on the offer later Friday.
Write to Robb M. Stewart at firstname.lastname@example.org
(END) Dow Jones Newswires
April 20, 2017 20:26 ET (00:26 GMT)
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