M&A boom: AusNet, TransUrban led a $20bn+ deal spree on the ASX this morning
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This morning on the ASX was a busy one for M&A action — even by 2021 standards.
Nearly US$3 trillion in M&A deals have been completed worldwide in the first 6 months of the year, and infrastructure assets have been among the more popular.
From an ASX perspective one of the most high-profile deals was the bid for Sydney Airport (ASX:SYD).
But today several companies unveiled new M&A deals, from either side of the bargaining table, and many investors were far quicker to embrace them.
Energy network operator AusNet (ASX:AST) kicked off this morning’s action, unveiling a takeover offer from Brookfield Asset Management.
Brookfield proposes paying $2.50 per share which values the company at well over $9 billion.
The AusNet board, while not giving the firm thumbs up yet, have agreed to let Brookfield conduct further due diligence on an exclusive basis to let it put forward a binding offer.
The board said if a binding offer was made, it would recommend shareholders vote for it.
The deal will require the backing of majority owners by Singapore Power and the State Grid Corporation of China. AusNet’s board said it conveyed the proposal to the pair.
Also getting a takeover offer was ALE Property Group (ASX:LEP), Australia’s largest listed freehold owner of pubs. A consortium managed by Charter Hall (ASX:CHC) put an offer which values it over $1.1 billion and the board has already recommended the board back it.
The board of ALE says the deal represented not just a premium to its recent share price but also to its recent independent valuation.
Both companies rose by approximately 20% this morning.
A handful of other ASX stocks, led by Toll road operator Transurban (ASC:TCL), also took part in the M&A action but on the buy-side.
TransUrban will snap up the NSW government’s remaining 49% stake in WestConnex for $11.1 billion, giving it full ownership of the road.
The toll road operator will fund the deal by issuing $4.22 billion of new equity, as well as existing corporate liquidity.
The NSW government will use the proceeds to invest in the NSW Generations Fund and also retire debt.
Both parties hailed the deal with TransUrban CEO Scott Charlton saying it will support free cash growth and dividends for shareholders for the life of the concession (which is close to 40 years).
The NSW government meanwhile said it would bolster the state’s finances and support the economy with the proceeds being reinvested into other infrastructure.
Amidst the M&A action this morning two smaller ASX companies also made acquisitions.
Despite Dubber having a market cap over $1 billion, this deal was smaller than the others this morning at $6.6 million.
But the company said it would help in adding an additional revenue generating service and expand its customer base.
The deal was sealed for $1.4 million in cash.