Australia's AusNet opens books to Brookfield affiliate after sweetened $7 billion bid

(Reuters) - Australia’s AusNet Services said on Monday it had opened its books to an affiliate of Canadian infrastructure investor Brookfield Asset Management after it received a higher non-binding buyout proposal of A$9.57 billion ($6.95 billion).

The deal comes amid a spike in mergers and acquisitions activity over the past year in Australia, with record-low interest rates encouraging institutional investors and companies to chase higher valuations.

AusNet, which owns and operates Victorian electricity transmission network, revealed that the revised A$9.57 billion bid came after it had rejected two unannounced previous bids last month from the Brookfield affiliate that valued it at up to A$9.38 billion.

The revised here A$2.50 per share offer - a 26.3% premium to AusNet's last close - was up from proposals of A$2.35 and A$2.45 tabled earlier.

That sent shares of the Australian energy infrastructure firm soaring, advancing as much as 20.7% to A$2.39 and marking their best intraday percentage gain.

AusNet said it had agreed to grant Brookfield access to its books and conduct due diligence on an exclusive basis.

“Should Brookfield make a binding offer at A$2.50 per share then ... it is AusNet board’s current intention to unanimously recommend that shareholders vote in favour of the proposal in the absence of a superior proposal,” AusNet said in a statement.

AusNet, which counts Singapore Power and State Grid of China as its two major shareholders, said the deal is subject to foreign investment review board’s approval. Temasek owns Singapore Power.

($1 = 1.3765 Australian dollars)

(This story corrects last paragraph to say Singapore Power, not Temasek Holdings, is one of the major shareholders in AusNet. Clarifies Temasek owns Singapore Power. Changes other major shareholder’s name in AusNet to State Grid of China from China’s State Grid Corp.)

Reporting by Sameer Manekar in Bengaluru; Editing by Muralikumar Anantharaman, Christopher Cushing and Sherry Jacob-Phillips