What happened to the Duet Group share price?
Shares of Duet Group Forus [ASX:DUE] gained over 9% today.
Why did DUE shares gain on Friday?
The government has approved Cheung Kong Infrastructure Holdings’ [HKG:1038] $7.4 billion foreign investment bid to take over Duet. The bid was approved with 99.3% support.
CKI is headed by Hong Kong billionaire Li Ka-Shing’s eldest son, and is the largest publicly listed infrastructure company in Hong Kong.
Shing has been looking to invest in Australia as an effort to diversify away from Europe. Last year, the Australian government blocked him from buying a majority stake in the state owned electric power network Ausgrid, citing national concerns.
According to Bloomberg, Shing already owns stakes in assets including SA Power Networks, Powercor Australia, Australian Gas Networks and CitiPower I Pty Ltd.
DUET invests in energy utility assets located in Australia and New Zealand. Investment assets include gas pipelines and electricity distribution networks.
The acquisition of Duet will give CKI access to assets like Energy Development Limited, Multinet Gas, United Energy, DBP Development Group and Dampier Burnbury Pipeline in Western Australia.
What now for Duet Group Forus?
Shares were up today to 3.01 from 2.75. According to The Australian Financial Review, CKI is offering 3.03 a share for DUET, which values the company’s equity at $7.5 billion.
DUET has large borrowing costs, and an interest rate hike could affect its future profitability.
By Selva Freigedo