Australia-based natural gas delivery giant APA Group agreed to purchase the rest of distribution firm Envestra Ltd. The agreement came after APA sweetened its bid to around AU$1.4 billion ($1.3 billion), according to Bloomberg.
In a statement today, APA said it will pay AU$1.17 for every Envestra share, depending on the latter's shareholder approval. This acquisition will give APA control over 14,000 miles of pipelines that deliver gas to customers in Victoria and South Australia. APA currently owns 33% of Envestra and operates its pipelines and networks, the report detailed.
Envestra turned down APA's initial bid in August and said that its shares were undervalued by APA. In a separate statement made today, Envestra said an independent board committee will forward the revised offer to shareholders and seek an outside expert to assess the value of the deal.
Under the terms of the acquisition, APA said Envestra shareholders can choose to receive 0.1919 APA shares for every Envestra share, or a stock and cash combination. Envestra investors will also receive a $0.03 dividend for each of their share that APA expects to pay in April, the report explained.
On July 16, APA said its initial offer for Envestra's shares was valued at AU$1.10 apiece, which already include the investor dividend, Bloomberg reported.
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