SYDNEY (Reuters) - Australia’s DUET Group DUE.AX on Friday said it had been advised by Cheung Kong Infrastructure Holdings (1038.HK) (CKI) that the Australian government has approved the Hong Kong company’s $5.5 billion consortium-led takeover offer.
There had been concerns the government could reject the deal after it last year blocked CKI from buying a state-owned power grid, Ausgrid, on the grounds of “national security”. The DUET assets include a smaller power grid as well as a gas distributor and a major gas pipeline.
DUET chairman Doug Halley said shareholders would now be able to vote on the CKI bid at a meeting later on Friday following the approval from the Foreign Investment Review Board (FIRB).
DUET shares jumped 9.5 percent at the open to A$3.01 ($2.26), just under the A$3.03 offer price, having traded well below the bid price on concerns the deal could be blocked.
In January, Australia formed a new body to oversee investment in critical infrastructure assets, including power grids. The government in February said it would weigh long-term geopolitical considerations when assessing bids for those assets.
Reporting by Jane Wardell and Jamie Freed; Editing by Shri Navaratnam