Herald Sun: B&B makes GasNet play [20jun06]

BABCOCK & Brown Infrastructure and Australian Pipeline Trust announced joint plans yesterday for an unsolicited $371.7 million takeover of Victoria's biggest natural gas transmission company.The partners have unveiled a conditional all-scrip offer for GasNet Australia, the former Victorian state-owned gas utility which listed on the stock exchange in late 2001.
GasNet owns and maintains nearly 2000km of high-pressure gas pipeline, serving about 1.4 million residential customers and 43,000 industrial and commercial users.
It reported a 3.3 per cent slide in net profit to $15.1 million in calendar 2005 based on revenues of $111.2 million.
Babcock and APT are already the biggest shareholders in GasNet, with a combined 14.2 per cent stake.

They have offered 1.545 Babcock stapled security for each GasNet stapled security, valuing GasNet scrip at $2.55. That is a 12.3 per cent premium to the volume weighted average price for the month to last Friday.
But GasNet shares shot past that mark yesterday, gaining 9.6 per cent or 23 to close at $2.62.
GasNet directors last night rejected the offer, saying it was not in security holders' best interests.
The takeover partners described their plan as "compelling" because it offered GasNet investors a chance to take advantage of Babcock's better track record of returns, strong distributions, greater market capitalisation, extra liquidity and more diverse business portfolio.
"This is an exciting opportunity for both GAS and BBI security holders," Babcock chief executive Steve Boulton said. "In accepting the offer, GAS security holders will become security holders in BBI, a globally diversified infrastructure fund with a solid history of generating growing tax-effective returns for its security holders."
GasNet distributions had fallen 9 per cent over the past three years while Babcock's had grown 29 per cent, he said.
In addition, all of Babcock's distributions had been tax deferred over the same period but GasNet's had been less than 60 per cent.
APT chief executive Mick McCormack said the deal would allow his group to better utilise the Victoria-NSW Interconnect, enabling increased gas flow through the Moomba Sydney Pipeline and improved competitiveness with the Eastern Gas Pipeline.
The bid is conditional on gaining 90 per cent acceptance and approval by the Australian Competition and Consumer Commission.
If successful, APT will raise the cash for its 50 per cent stake through debt facilities.
Babcock shares lost 1 yesterday to $1.64, while APT gained 9 to finish at $4.33.
Babcock, the nation's second biggest investment bank, has $6.1 billion in assets and reported a $68.3 million net profit in the half-year through December.