Cheung Kong Infrastructure (CKI) has offered to buy Australian company Duet Group at a premium of 28% to its current share price, according to a report in the Bloomberg financial news website.
The move comes four months after CKI’s bid for the country’s electricity grid was blocked by the government.
Shares in Duet, which owns stakes in a number of energy distribution assets, rose 20% after the unsolicited offer became public on Monday, 5 December.
The company issued a cautious statement saying it was evaluating the proposal and "at this time security holders are advised to take no action as there is currently no certainty the proposal will proceed further".
CKI is run by Hong Kong billionaire Li Ka-shing. It made an offer of A$3 a share for Duet last week, valuing the company at A$7.3bn ($5.4bn). Unnamed sources told Bloomberg that the board of Duet will consider the offer.
Duet’s website lists its main asset as the Dampier Bunbury Natural Gas Pipeline in Western Australia, which covers 1,600km and links the gas fields located in the Carnarvon Basin with population centres around Perth, in the south-west of the State. It also has a stake in electricity distributor United Energy, gas distributor Multinet Gas, pipelines business DBP Development Group and Energy Developments.
In August, CKI and the State Grid Corporation of China made a bid to take a controlling stake in Australia’s national grid – a deal that was blocked by the Australian government.
The offer for Duet may also prove controversial, given Australian unease with the financial pressure from its northern neighbour.
Li, who is 89, has a personal fortune of $27bn, making him the second richest person in Asia. He owns several Australian infrastructure assets through CKI, including a controlling stake in South Australia’s Power Networks, Australian Gas Networks, Citipower and Powercor. He is popularly known as "Superman" in Hong Kong, owing to his business prowess.
Image Li Ka-shing, who rises every day at six to play a round of golf (Creative Commons)