* Conditional offer just above APA's bid
* Li's companies seen continuing overseas expansion in
search for growth
* Envestra offer shows continued push into clean energy
* Tycoon Li Ka-shing consortium offers A$1.32/shr
(Adds further details, background)
By Maggie Lu Yueyang and Donny Kwok
SYDNEY/HONG KONG, May 8 Companies controlled by
Li Ka-shing have launched an unsolicited $1.8 billion takeover
offer to other shareholders in Australian gas distributor
Envestra Ltd, trumping a rival bid as Asia's richest
man continues to expand his business interests abroad in a quest
Cheung Kong Infrastructure (Holdings), which
already has a 17.46 percent stake in Envestra, is teaming up
with Li's other companies Cheung Kong (Holdings) and
Power Assets Holdings to buy the remaining shares.
The A$1.32 a share offer is at a 16.8 percent premium to
Envestra's last traded price and trumps an earlier offer from
Australian Pipeline Ltd (APA), which aready owns a
third of Envestra, and values the entire company at A$2.37
billion ($2.21 billion).
Envestra is the latest in a series of overseas
infrastructure businesses to be targeted by Li's empire, as it
cuts his exposure to Hong Kong, where he began building his
conglomerate some 64 years ago.
Li's companies are seeking stable investment opportunities
in well-regulated markets outside Hong Kong, where opportunities
for expansion are becoming limited. Just this year, the tycoon's
companies have raised about $9 billion by selling stakes in Hong
Kong firms and analysts expect a part of the proceeds to be used
for buying overseas businesses.
"The Envestra bid suggests that the acquisition strategy is
an ongoing process as CKI aims to continue building up its clean
energy portfolio," said Ben Kwong, director and head of research
at KGI Asia.
Global infrastructure investor Cheung Kong Infrastructure
expanded into waste management in 2013, acquiring New Zealand's
EnviroWaste for around HK$3.2 billion, and the Netherlands
largest energy from waste player AVI for HK$9.7 billion, leading
a consortium of Cheung Kong (Holdings) Limited, Power Assets and
the Li Ka Shing Foundation.
The firm has acquired a series of UK power and utilities
assets in recent years, including Northumbrian Water, Wales &
West Utilities and Northern Gas Networks. Profit from group
businesses in the UK amounted to HK$7.5 billion in 2013, a 37
percent increase for the same period a year earlier, according
to Cheung Kong Infrastructure's annual report.
In a statement issued after the Sydney stock market's close,
Envestra said the Cheung Kong consortium had proposed a
conditional cash offer of A$1.32 per Envestra share.
Envestra said it would set up an independent board
committee, excluding directors representing APA and Cheung Kong,
to consider both Thursday's proposal and the bid from APA.
The latter's offer, launched last July and sweetened in
December, values Envestra at A$2.35 billion based on APA's
closing price on Thursday.
Two people with knowledge of the matter had told Reuters in
March that Cheung Kong might block APA's takeover of Envestra,
which was recommended by Envestra's board.
APA, which delivers about half of the country's annual gas
use, has been keen to broaden its reach and the deal follows its
A$1.4 billion acquisition of Hastings Diversified Utilities Fund
An APA spokesperson declined to comment on the Cheung Kong
offer. Officials at Cheung Kong weren't immediately available
Goldman Sachs Group is advising Envestra.
($1 = 1.0713 Australian dollars)
(Additional reporting by Stephen Aldred in Hong Kong; Editing
by Kenneth Maxwell and Greg Mahlich)