Herald Sun: Babcock push for GasNet deal [04jul06]

BABCOCK & Brown Infrastructure and Australian Pipeline Trust have stepped up their battle for control of GasNet in a bid to convince investors to accept its $371 million deal.Last week the directors of GasNet unanimously rejected the hostile takeover offer labelling it "inappropriate" and highly conditional.
The GasNet board said the deal offered no premium for control of the company and the value of the offer included a dividend which would not be available to GasNet shareholders.
However, BBI chief executive Steven Boulton said the deal would offer GasNet shareholders better returns through greater diversity in asset class as well as a better spread of geographic and regulatory risk.
"They (GasNet) are largely restricted to one country and one regulatory regime and that offers them a more restrictive set of opportunities in terms of growth and distribution going forward and they are more exposed to weather risk," he said.
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GasNet has regulated revenues from high-pressure pipelines from Longford and the Otway Basin to major Victorian centres. It also has a 450km pipeline between Port Hedland and the Telfer goldmine in Western Australia.
Mr Boulton said BBI wanted to increase its Australian asset base. It had teamed with APT because it has more Australian investments than BBI, he said.
APT has interests in 7500 kilometres of pipelines in New South Wales, Queensland, the Northern Territory and WA. GasNet's network is connected to APT's Moomba-to-Sydney pipeline.
"We have asset management competency, but it is largely overseas . . . so it was a natural link for us," he said.
BBI holds assets worth almost $10 billion across energy transmission and distribution, transport and power generation.
The bidders are offering 1.545 BBI stapled securities for each GasNet share. If the bid succeeds, APT will then buy a half share for $180 million.
The pair already own 14.2 per cent of the former government-owned natural gas pipeline company.
GasNet's board is believed to be considering commissioning an independent expert's report to assess the value of the offer.
GasNet chief executive Christine O'Reilly said the deal would lead to "leakage" of management fees to Babcock & Brown, which manages the listed vehicle BBI.
BBI shares closed up 1c at $1.60 while GasNet slipped 3c to $2.55.