HONG KONG • Billionaire Li Ka Shing agreed to buy Duet Group in a A$7.4 billion (S$7.9 billion) deal, sweetening an earlier offer, as the Hong Kong tycoon seeks to expand his infrastructure assets in Australia to diversify away from Europe.
In the revised bid, endorsed by Duet, investors will receive A$3.03 for each share in the energy company, including a newly announced special dividend of 3 Australian cents a share, according to statements from the companies.
That is 9 per cent higher than last Friday's closing price for Duet, which yesterday climbed to as high as A$2.94 in Sydney trading.
Duet would give Asia's third-richest man access to an energy network covering an area three times the size of Hong Kong as the tycoon faces uncertainties in Europe - his biggest market - with a string of elections this year.
The deal, his biggest in Australia if completed, will need to be cleared by the government, which in August blocked him from buying a majority stake in Ausgrid, citing national security concerns.
Cheung Kong Infrastructure Holdings (CKI) said on a media call it was hopeful of receiving government approvals.
"We are confident we will get foreign investment approval, to be quite frank, otherwise we wouldn't have made this offer," said Mr Andrew Hunter, deputy managing director of CKI, Mr Li's company.
Three of Mr Li's companies - Cheung Kong Property Holdings, CKI and Power Assets Holdings - will split the offer pending shareholder approvals.
The deal, expected to be completed in May, is also subject to clearance from Duet's investors and Australia's foreign investment review board.
The sweetened bid comes more than a month after Duet said it received a A$3-a-share offer from Mr Li. Duet's largest investor, local pension fund UniSuper, supports the deal, chief investment officer John Pearce said.
Buying Duet would expand Mr Li's interests in Australia as his companies already own stakes in assets including SA Power Networks, Powercor Australia, Australian Gas Networks and CitiPower I.
Duet said in a statement that the offer recognises its "value and future growth platform."
Expanding in Australia would also help Mr Li lower his risks in Europe, particularly in the United Kingdom, which is the biggest profit generator for his flagship firm CK Hutchison Holdings, as Britain's decision to split off from the European Union threatens to undermine the economy.
He is also preparing for more uncertainty with elections looming in the Netherlands, France and Germany that could reshape the political landscape in the region this year.